Almost all spread betting accounts are applied
for online with an increasing trend towards firms removing the
option to use paper based application forms.
Online accounts opened in 5 minutes
This has resulted in a very streamlined application process
with some spread betting firms claiming that the time to complete
their online application form to account acceptance being as fast
as 5 minutes. The ease of account opening together with the very
low opening account deposit requirement (generally just £100) has
meant that huge numbers of spread accounts are opened every month
with some reports suggesting that there are now over 100,000 active
spread betting accounts in the UK.
Easy to add funds and collect your winnings
Most spread betting companies will accept payment by debit and
credit cards as well as bank transfers. It is very important to
understand how your chosen spread betting company will operate
their margin policy (margin is the amount of money you need to have
on your account in order to support your open bets).
Auto close out
In 2008 the markets became incredibly volatile which resulted in
some of the spread firms taking bad debt charges against customers
who were trading but were unable to meet their margin
requirements when their positions moved against them.
Since then some of the bigger firms have adopted something
called an 'auto close out system' where a client's positions are
automatically closed if their account balance falls below
pre-determined levels.
Whilst this is a very efficient way of managing their clients
risk to the market it does require careful vigilance by the trader
to ensure that their account is correctly funded at all times so to
avoid having open positions closed out should the market suffer a
short term dip or unexpectedly spike higher.
Experience, information and KYC
Opening a spread betting account doesn't require previous
trading experience (unlike futures or CFD's) and the information
required by the spread betting company is the usual standard stuff
you get asked for when applying for any financial product. When you
click the apply button the company will try and identify you using
their in house KYC systems (Know Your Client) so providing they can
see that you are registered at your address, are on the voters role
and don't have any negative credit history, you are likely to have
your account up and running within minutes of your application.
So who to use?
With so many spread betting companies offering services it can
be a difficult to decide which provider to use. Trading.co.uk has
looked at the current providers and has created a unique
comprehensive comparison service to assist in you decision making
process.
The cost to trade is now as low as it has ever been but it's
important not to become too blinkered by this when you are making
your choice. Finding a broker that can offer you a service that
suits your type of trading style, risk appetite and technological
requirements is just as important as getting the lowest spreads. If
you have a question about a specific broker that is not already
covered please get in touch. We are an independent company with
many years of experience in the retail market and will endeavour to
find answers to any queries you may have.
Further resources on Spread betting
Make the right choice with Trading.co.uk
The cost to trade is now as low as it has ever been but it's
important not to become too blinkered by this when you are making
your choice. Finding a broker that can offer you a service that
suits your type of trading style, risk appetite and technological
requirements is just as important as getting the lowest spreads. If
you have a question about a specific broker that is not already
covered please get in touch. We are an independent company with
many years of experience in the retail market and will endeavour to
find answers to any queries you may have.
Thank you
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