Irrespective of whether the market is falling or rising, you can utilise spread bets to speculate on market consequences. You can either go long, that is, give priority to buying certain stocks, and if there is any increase in the price of that share, your profits will also rise right along with it. Your other choice is to go short, which means you suggest your investors to pull out, and similarly, your profits will rise if there is a fall in the price. However, if you go long on the price and there is a fall in the basic stock price against your prediction, you will incur a loss.

This type of trading is a margined product. What this means, in simple terms, is that you are only required to deposit a small percentage of the full worth of your standing. This means that, compared to traditional trading, the potential for losses, or profits, from the perspective of initial capital investment is considerably higher. Depending on the market, the requirement for margin investment is normally between one and ten percent of the total worth of your standing. Companies such as ETX Capital also offer prices on more than ten thousand trading markets for your convenience.

What is a spread?

Just like conventional share trading, or in fact, any other forms of trading, you will be quoted two prices for all your trades:

• Buy price: This is the price at which you can go long if you anticipate the basic market to rise. And secondly,
• Sell price: This is the price at which you can go short if you expect the primary market price to fall.

Hence, the difference between the buy price and sell price is referred to as the spread.

You will be quoted narrow spreads across all the markets. This gives you the chance to fully maximise your profits, no matter which direction the market is heading in, whether it’s up or down. With a professional firm like ETX Capital, you will be offered some of the thinnest spreads in the industry, as low as 1 point on the UK 100, France 40, Germany 30 and Wall Street. However, these options are only available during market hours.

Daily funded trade

A DFT or Daily Funded Trade is a form of trading where the price of the primary instrument you will be quoted is based on its existing market price. Due to the fact that daily funded trade has the narrowest spread available, it is generally used for short term trading.

It does not include dividends and daily financing in the computation of the prices. However, on your account, they materialise as separate charges. As pointed out in the market information, daily funded trades normally have a lengthy settlement time period.

Daily funded trade is liable to dividend adjustments as well. So if there is a dividend payment made to any fundamental equity relative to your DTF standings, an ex-dividend adjustment will be made on those DFTs which you hold.

For more information, contact a professional trading firm as your one stop shop to all the spread betting solutions available.