Greater London, England -- (SBWIRE) -- 04/15/2011 -- Spread betting provider City Index (http://www.cityindex.co.uk/) take a look at the five biggest spread betting myths.
1) Spread betting is difficult to understand.
Not true. Financial spread betting is not easy, but it is not a complicated concept. The problem is when spread bettors risk real money without fully understanding what they are doing. This opens them up to potentially significant losses.
The best way to learn spread betting is through a combination of theory and practice. Providers such as City Index (http://www.cityindex.co.uk/) offer spread betting seminars and webinars for traders of all levels, so these are ideal places for beginners to start and for more advanced spread bettors to improve.
2) Spread betting is a man’s game.
Not true. The percentage of female spread bettors continues to grow year-on-year. What is more, City Index technical analyst Sandy Jadeja has noted that women actually possess a better spread betting mentality than men. He believes that females are naturally more cautious traders and thus prepare their spread betting research more effectively than their male counterparts. This is a view shared by several financial spread betting companies who have revealed that their female clients clearly outperform their male ones.
3) Spread betting is purely for the wealthy
Not true. In fact, because spread betting is a leveraged product, it actually allows you to control a much larger position than if you were to make an identical investment in standard trading. The advantage of this is that your profits will be inflated, but the obvious disadvantage is that your losses will be magnified too. Ultimately, spread betting is for people of any financial standing, as long as they only risk money that they can afford to lose.
4) Spread betting companies make money off your losses
Not true. A spread betting company makes money off every single trade you make, regardless of whether you win or lose, as their costs are met in the original bid-offer spread. Essentially, this means that spread betting companies actually prefer you to be a successful spread bettor, as those who make profitable spread bets are probably more likely to return and trade more.
5) Your spread betting affects the markets and/or other traders
Not true. Unless you are trading in a closed market, there is no scenario in which another spread bettor can benefit or suffer from your own financial spread betting. Similarly, spread betting platforms purely serve to mirror the real markets, so the spread bets you place have no bearing on the price movements or the values of the actual companies themselves.
For a true reflection of spread betting, visit http://www.cityindex.co.uk/
Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
About City Index
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, spread betting.
We constantly look to improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support. For more information, visit http://www.cityindex.co.uk/.