The Beginner's Guide to Financial Spread Betting

Jacket text for The Beginner's Guide to Financial Spread Betting

Spread betting was once the domain of institutional investors, city traders and high rollers. Not any more. You would now be hard-pressed to find any other form of trading that allows such a scale of return.

The aim of this book is to give you a basic understanding of how spread betting works, so that, with a little time and effort, you can find out how to turn a pauper's budget into a king's ransom.

However, an issue that should always be at the forefront of a novice spread better's mind is managing risk. As such, the secondary aim of this book is to explain the risks involved, and how to reduce them.

The book is accessible to investors with a basic grasp of investing and yet also interesting enough for the more experienced trader. The book starts with the basic 'what/when/why/where/who' and then progresses to the 'how' in detail.

The road to successful spread betting starts with education. By the time you finish reading this book, you should know how to place a spread bet, the rules of the game and how to trade successfully. The appendices and glossary at the back serve as your quick and handy cheat notes when you start trading.

As the saying goes: "Don't just learn the tricks of the trade. Learn the trade."

Chapter headings for The Beginner's Guide to Financial Spread Betting

1. Why spread bet?
- What is spread betting?
- Pros
- Cons

2. How it works
- The basics
- A typical conversation
- Opening a trade
- Closing a trade
- Margin requirements
- Margin call
- Getting started
- What can you spread bet on?
- What does a dealing room look like?
- Is spread betting for me?

3. Trading online - a step-by-step guide
- Opening and closing a trade
- Types of orders
- Setting and cancelling a stop-loss
- Tracking your trades
- Rolling over a trade

4. The bid-offer spread explained
- The spread bet price vs the underlying price
- What is the bid-offer spread?
- How fast or slow does the spread change?
- Shopping around for the best deal

5. Margin trading explained
- What is margin trading?
- The pros and cons of margin trading
- Risk management
- The first rule of spread betting is to preserve your capital
- The importance of a stop-loss
- What happens if you forget to cancel a stop-loss order
- Guaranteed vs non-guaranteed stop-loss
- Other types of stop-loss

6. Tools of the trade
- Fundamental analysis
- Examples
- Other buy/sell signals
- Technical analysis
- Examples
- Resources

7. The big picture
- Economy
- Liquidity
- What are the implications?
- Volatility

8. Spread betting strategies
- Get shorting
- Hedging
- Momentum trading
- Pairs trading
- How do you do a pairs trade?
- Arbitrage

9. Facts or feelings?
- Run with the rally
- When to take profits
- When to cut your losses
- Examples

10. It's a wrap
- Closing an account
- I want a refund! How to file a complaint
- A final word . . .

Case studies: A tale of three traders
Sarah Watson: Brains over brawn
Patrick Gray: The man with a plan
Alex Benjamin: Shaken but not stirred

Appendices
- Appendix 1: Comparison of conventional share trading versus spread betting
- Appendix 2: Spread betting at a glance
- Appendix 3: List of spread betting companies
- Appendix 4: Useful websites

Glossary
Index

About Michelle Baltazar

Michelle Baltazar is an award-winning finance journalist with more than five years of experience in the media sector. Up until 2003, she was a finance journalist for London-based weekly investment magazine Shares where she wrote a weekly column on derivatives and separately, on fund managers and their investment tactics.

More about Michelle Baltazar