The Beginner's Guide to Financial Spread Betting, 2nd edition

Jacket text for The Beginner's Guide to Financial Spread Betting, 2nd edition

Now fully revised and updated, The Beginner's Guide to Financial Spread Betting provides an essential grounding in the basic principles of spread betting.

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

The popularity of spread betting has increased massively over the last few years, with thousands of new traders entering the market every month. And, whilst the basic principles of spread betting are simple, there is jargon to overcome and some important lessons to be learnt if the novice trader is going to make the most of the opportunities available. However, these huge opportunities do carry some risk and this book describes how it is vital that traders manage those risks and understand how to minimise them wherever possible.

Aimed squarely at beginners, the book is designed to be accessible to readers with perhaps only a basic grasp of investing. It starts with an explanation of what spread betting is, moves in to cover the mechanics of a trader, then explains the bid-offer spread and margin trading. It then discusses the tools available to traders and looks at some of the key spread betting strategies before taking a brief look at trading psychology and some real-life case studies. The appendices and glossary at the back then serve as your quick and handy 'cheat notes' when you start trading.

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 so that you too can, with a little time and effort, start to make serious money from the markets.

Chapter headings for The Beginner's Guide to Financial Spread Betting, 2nd edition

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