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Whether you are new to the game or you’re an expert trader, spread betting is your best shot at predicting future changes in prices in the financial markets. You’ll enjoy flexibility while speculating changes in prices during the market’s upturn and downturn.
In this article, we’ll point you to the top spread betting brokers. We’ll also equip you with the information and guidance you need to trade like the expert you are. But first, we start with the basics.
What Is Spread Betting and How Does It Work?
Spread betting is a derivative product used in speculating the changes in the rates of an asset in the financial market without necessarily owning it. You’re basically placing a bet on whether the prices will rise or fall.
To successfully track asset values, you should understand these three concepts – short and long betting, margin, and leverage.
Long betting entails anticipating an increase in asset prices in a certain timeframe. While short betting involves anticipating a decrease in asset prices over time.
Margin is the small deposit you put down when spread betting to open a position. Leverage, on the other hand, helps you to gain exposure to the market for a fraction of the said market’s cost.
Pros and cons of spread betting brokers
- Saves you from unscrupulous financial managers
- Source of trader education and reliable information for informed trading decisions
- They offer flexibility and speed since most of them operate online.
- Traders get a chance to monitor their investments in real-time
- Some brokers charge high commissions
- Traders have no chance of developing a good personal relationship with the broker
Best spread Betting brokers in 2021
Here are the spread betting brokers taking the markets by a storm in 2021;
What to Consider When Choosing a Spread Betting Broker
Here are the key things you should look for in a spread betting broker;
- Trust – it’s a crucial factor to consider when choosing a broker. You have to have faith in the broker you decide to work with. This will heavily depend on the reputation they have, and their experience with other spread betters. You can find lots of honest user reviews on trading forums and individual broker websites.
- Experience – How long has the broker been in existence? How much experience do they have in spread betting? Working with an experienced broker increases your chances of success.
- Tradable asset – How many assets do your broker trade? Indices, shares, and commodities are the most common. Knowing this is crucial, especially if you plan on having a long-term working relationship with the broker
- Regulation – First check if the broker is regulated by the relevant bodies where it operates. The broker must also be transparent about their financial history.
- Trading platform – the broker’s trading platform should be user-friendly. It should also be equipped with various tools to make trading easier. Where possible, go for a trader that gives you a wide variety of trading platforms.
- Customer service – apart from having a good platform, you also want to go somewhere you’ll be well taken care of. A good customer service platform should have a 24-hour live chat. There should also be other ways of reaching the customer service team such as direct calls, e-mail, or even social media handles.
- Cost – the whole idea of spread betting is to maximize returns. And, that means cutting unnecessary costs. You should, therefore think carefully about how much your broker will demand as commission. To maximize your returns, you should also work with the lowest fees.
Getting a suitable spread betting broker can be a daunting task. It gets even harder when you are a new trader. Or, when every single one of them on your list seems to offer the best services.
Our list of the best spread betting brokers in 2021 above will help you make an informed choice. Carefully compare and analyze brokers based on their reputation, experience, how much they charge as commission, and their tradable assets.
Ensure your chosen broker is regulated and fully licensed by any of the major agencies. Also, survey its trading platform just to see how it works. So, go now, choose the best broker and watch your spread betting career grow as you minimize risks and multiply gains.
Frequently Asked Questions
What’s the minimum tradable amount in spread betting?
This varies from one broker to another. Some will need from as low as $1 while others demand up to $100, or more. Be sure to check with different brokers and choose the one you can afford.
Are spread betting brokers regulated?
Yes. A good broker should be regulated and licensed by the relevant authorities so they operate within the provisions of the law. They are also regulated to protect their clients’ interests, funds while ensuring fairness for all stakeholders.
Is spread betting legal?
That depends on where you intend on doing it. While in some places it is legal, in others it is not. In the UK, for instance, spread betting is considered gambling. That, therefore, makes it tax-free in the UK while illegal in the US since it has stricter gambling laws.
Which is the best spread betting platform?
The above spread betting brokers are the best in the market today. And, one of the reasons is because they have some of the best trading platforms. Be sure to check them out.
Are spread betting profits taxable?
Taxation laws vary from one country to another. In the UK, for instance, spread betting is 100% tax-free.
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