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| In spread betting you make a bet on the
odds set by the spread betting company on the unknown outcome
of an event. Thus, it involves a high level of risk. The spread
includes two prices quoted by the spread betting company using
an instrument. You can wage on either of them and win or lose
according to how right or wrong you ultimately prove to be. |
| Before getting into spread betting you must
carefully weigh your options and if necessary take independent
advice. It is not everyone's cup of tea. You must consider
the amount you can afford to lose because the prices can rapidly
move against you resulting in heavy losses that can be way
higher than you original stake or deposit. Once you lose you
are obliged to make the remaining payments. |
| By issuing a stop order or limit order you
can actually limit the loss you may incur in spread betting.
You can attach an 'on stop' opening order when you buy or sell
at a price lower than where the market is currently trading
or give an 'on limit' opening order if you buy or sell at a
price higher than the current market's trading value. |
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