Iron Condor » financial

Where To Spread Bet During The Credit Crunch

admin — Sat, 26 Dec 2009 02:42:25 +0000

In such volatile times there will always be opportunities to make a profit and plenty of opportunities to lose more.One industry that has been thriving is the spread betting industry. Whilst there is currently a ban on shorting financial stocks, investors are still enjoying the ability to buy and sell indices like the FTSE 100, thousands of other stocks and shares, forex markets, crude oil, gold etc. etc. Naturally many investors like the fact that there are no commissions or brokers fees and that spread betting profits are tax free*. That is all well and good. Although at this point I should mention that spread betting is not a one way street, it carries a high level of risk to your funds. You can lose more than you initially invest. It does not suit all investors. In short, you should only speculate with funds that you can afford to lose. And, like the adverts say, ‘ensure you understand the risks and seek independent financial advice if and when necessary’.The above pros and cons are not the only considerations in today’s volatile market.For the investors across the world there are further important considerations:1) Am I trading on a stable platform? If I need to make a trade or close one now will the platform be up and running or down for ‘essential maintenance’?2) Are my funds safe? Or if the company in question goes bankrupt do I lose everything I have on deposit?3) What happens if I trade on a particularly volatile day? How can I reduce my downside?These are questions you should be asking yourself in order to help minimise your risks.Most of the big, established spread betting companies answer these questions quite well. For example, IG Index recently reported, “during one week in October we took over 700,000 trades in a period of high volatility, but our platform was 100% reliable with absolutely no downtime”What about my funds on Deposit? FinancialSpreads.com, IG Index and the other established firms segregate your funds in a designated account. The account is ring-fenced from trading activities and covered by the Financial Services Compensation Scheme to make sure your money is safe. What happens if I trade on a particularly volatile day? How can I reduce my downside?Again, the spread betting companies have moved on from the days of ‘if you lose, unlucky’. The firms now offer a variety of options. FinancialSpreads.com, for example, attaches a Stop Loss to every single opening trade you make. So if your trade goes wrong your bet will be closed out when the market hits the Stop Loss. It should be noted that Stop Losses are not guaranteed, eg if the market gaps then your trade will be closed at the next level the market trades at.One of the ‘relatively new’ companies, ShortsandLongs, has gone one step further and attached a Guaranteed Stop Loss to every single opening trade you make. I say ‘relatively new’ because ShortsandLongs is a new service but operated by Spreadex. Spreadex is an established operator that has been in the market since 1999.The Guaranteed Stop Loss works just like a Stop Loss. If your trade does not go according to plan it will be closed out when the market hits the Guaranteed Stop Loss. However, if the market gaps then your trade will still be closed at the level of the Guaranteed Stop Loss, not the next traded level.A number of companies, now offer Guaranteed Stop Losses. The trade off is often a slightly larger spread however that can be worth the peace of mind (and…reduced risk).In such volatile times there will always be opportunities to make a profit and plenty of opportunities to lose. Make sure you are not losing money for the wrong reasons.* Tax law can change and/or may be different if you pay tax in a jurisdiction outside the UK.

Trading the Markets and the Financial Recovery

admin — Thu, 19 Nov 2009 03:33:53 +0000

With the world in recovery mode, many people are still questioning how the financial markets got so out of control. They are also questioning something a little closer to home; how to better look after their own money and finances.If we are being honest with ourselves, we would probably admit that we can improve on at least one of the following; long term investments, tax efficiency, actively reviewing our existing investments and looking at new opportunities that the markets in 2009-2010 have provided / will provide.Also, I don’t think that there are many of us who wouldn’t benefit from putting more thought and effort into these key areas. Having said that, there are a growing number of individuals who are making use of a newer, and highly regulated, form of trading.One type of trading, namely financial spread betting, has a range of attractive features and is an option worth considering as part of your portfolio.When speculating though you must always remind yourself that the markets can go down as well as up. With spread betting you can lose more than your original stake or investment.But why trade if there is a risk?Whether you have an existing investment plan or not, it always worth considering any avenue that offers quick, simple access to the markets and a range of tax-free* advantages. Spread betting is one such avenue.Of the many other advantages, spread betting profits do not incur capital gains tax*. You are not actually buying and selling any assets or stock or shares. You are simply speculating on the future price or value of a financial market.A boon for many spread bettors is the sheer convenience of trading over the phone and online, even after the main stock markets and futures exchanges have closed.Another plus point is that there may be occasions when an investor wishes to close a spread bet early. This can work in two ways. It can help you limit a losing position or it can also help you lock in profits on a winning trade.The Financial Services Authority regulates the spread betting companies. This helps to ensure a certain level of quality or, more importantly, financial protection. With regulated companies like paddypowertrader you can trade some markets 24 hours a day, including key Forex and Stock Market Index markets. Naturally, you can also trade Crude Oil, Gold, UK and US shares and so on.So whilst there are a good number of positives, it is important to understand the negatives.Spread bets do carry a high level of risk so you should only speculate with money you can afford to lose. Before you trade, please ensure that spread betting matches your investment objectives, make sure you familiarise yourself with the risks involved and seek independent advice where necessary.* Based on current UK Tax law. If you pay tax in a jurisdiction other than the UK then this may be different.

Trading the Markets after a Recession

admin — Thu, 12 Nov 2009 14:50:41 +0000

So it looks like we have avoided a 1930’s style depression however the current forecasts still suggest slow growth and a difficult time ahead. So what should you do in a difficult environment with your own finances?If we were to be honest with ourselves, then we should probably accept that we can improve on at least a couple of the following; tax efficient investments, long term investments, actively reviewing our existing investments and looking at new opportunities that the financial markets are currently providingI am sure we all appreciate that we could benefit from planning more. That is not to say everyone is simply sitting on their hands. Many people actively trade stocks and shares.The increase in the popularity of spread betting is understandable. A few of the attractive benefits include the fast nature of placing a trade and the large variety of global trading options on offer.Naturally, as with all types of investment, be it on Stocks and Shares, ETFs, pensions etc, there is a negative side and with spread bets you need to be careful because you can lose more than you initially invested.If there is a risk to your capital then why should you contemplate spread betting as part of your investment strategy? Spread betting can be beneficial on a number of fronts, from tax efficient investments* to ease and speed of making a trade.There are many benefits. For example, spread betting profits do not incur capital gains tax*. You are not actually buying and selling any assets or stock or shares. You are simply speculating on the future price or value of a particular financial market.As discussed, investing does have its risks. Nevertheless, there are things you can do in order to reduce your downside. Adding a Guaranteed Stop Loss Order to your spread bet helps reduce your risks. If you start to lose on a trade and the market continues to move in the wrong direction but hits your Stop Loss then your trade will be closed and you won’t lose any more money.In order to spread bet you do not take possession of any assets or stocks. You are just speculating on the future value of a market. This allows you to place trades quickly and with little fuss, an important feature in fast moving markets.Where to trade? A number of spread trading firms offer the usual benefits of letting you trade thousands of international markets as well as letting you trade outside normal market hours. Companies, like Capital Spreads and FinancialSpreads.com, will also let you trade markets like Crude Oil, Gold, the German Dax and the UK FTSE from Sunday evening all the way through to Friday evening.So whilst there are a good number of positives, it is important to understand the negatives.Spread betting carries a high level of risk. You should only speculate with money you can afford to lose. Like the adverts say, before you trade, ensure that spread betting matches your investment objectives, make sure you familiarise yourself with the risks involved and, where necessary, seek independent advice.What else should you consider when trading?In the numerous chat rooms and internet forums there are many trading tips and theories. Some are fairly sensible, some less so. The following includes some of the more common principles.It is worth having a look at a spread trading practice account. These are free accounts with virtual funds. If you are less familiar with this form of trading then a little practice should help you understand the positive and negatives as well as the various types of bet you can place.Greed can be your worst enemy when trading. It can be tempting to trade lots of positions in lots of different markets. Personally, I tend to trade 0-5 markets at any one time. I have no idea how anyone can fully research and make informed decisions on 20 open trades, especially if they start moving against you.* Since you are placing a bet rather than buying an asset or share, it is treated like a bet by the UK and Irish tax authorities which means your profits are tax free. Tax laws can change.

Stock Trading for Bold Brave Investors

admin — Tue, 03 Nov 2009 14:53:14 +0000

Stock trading is one of the last true meritocracies. All that matters for your investment success are your own decisions. Stock trading is a precision-based activity and one tiny mistake in judgment could send you plummeting right to the bottom and result in a huge loss.
Likewise, the opposite could happen. You may make a great buying decision that will put you on the path to riches. Traditional stock trading is done at stock exchanges, which are places where buyers and sellers meet and decide on a price, although electronic trading is gaining in popularity. Stock trading is affected by how well the economy is doing and by basic supply and demand considerations.
Stock Trading is a get rich slow process. Money can be made, but it takes time. Stock trading is something that interests many people because it offers them a chance to make money without breaking into a sweat. In addition, it has a lot of excitement attached to it especially when using short term strategies that help pit traders against the stock market.
Stock Trading is trading stocks and shares of different types of companies and organization at the stock exchange. In every country, there is a stock exchange where various companies get their shares listed, when they arrange to raise required funds by means of issuing shares.
Stock trading is a very competitive field and in order to succeed you need to FOCUS on a set of simple strategies that you can implement without hesitation. The real “secret” of the stock market game is enclosed within the trading set ups and market signals you rely on to decide when to buy or when to sell shares. Stock trading is a business (because it is done for making money).
So as in a business, in stock trading, one needs to complete solid planning before making any buy/sell/trade. Stock trading is viewed by some people as a very complicated matter. This is regarded by many as an arena better reserved for those who have extensive exposure and experience in stock trading.
Stock trading is a game in which you cannot afford to be average. Thousands of new and inexperienced traders are being charged hundreds, even thousands of dollars by scam artists and self proclaimed experts for dubious stock picking services and mechanical buy and sell signal generators.
Stock trading is a relatively simple activity compared with other professions, particularly with the tools available in today’s Internet world. It is certainly within your abilities, and as you educate yourself on and build your skills, you’ll find that your fears subside as your confidence grows.
Researching a stock and then buying online it is one part of the story. The other part being how to plan a trade with an exit strategy? You must research the risks attached to online trading to make sure you are prepared for the worst. Be determined and goal orientated.
Exchange traded funds are good to use for trading and investing. By keeping trading simple, there is less stress and more opportunity to profit. Exchange Traded Funds, also known as ETFs, are index funds traded on the major stock exchanges just like stocks. An index fund involves a collection of securities, much like mutual funds, except that ETFs differ from mutual funds in some distinctive ways.
Options are bets about the future price movement of exchange traded securities. The prospect of unusually high returns always signals unusually high risk so be careful about trading options. Timing is everything.
Options are a great way to both earn and lose a lot of money. If you’re interested in involving yourself in the more unpredictable, risky, and spontaneous part of the stock market then trading options is something you should investigate. Option strategy is about selection of the best stock opportunities and following your signals. Here, you can achieve success if you are acquainted with the correct option trading strategy .
There are online resources available that will provide you with free simulated stock and option trading. You will easily find enough information to start your trading venture. You can practice trading stocks, options, spreads, futures, short sells, and so forth. Just run a search for “demo stock trading accounts” and you will find a good list to research.
Stock and option trading is a big game in many ways. But as it is a game involving the exchange of money if you play you need to take the game seriously.

Financial Trading Tips

admin — Mon, 26 Oct 2009 02:54:55 +0000

With the world in recovery mode, many people are still questioning how the markets got so out of control. They are also questioning something a little closer to home; their own finances.Some people will be looking for more tax efficient investments. Others will want to diversify their existing portfolios as well as look at new investment opportunities.I don’t think that there are many of us who wouldn’t benefit from putting more thought and effort into these key areas.The one thing you can see in the newspapers and financial websites is that more and more people are turning away from just having a pension and a few stocks and shares.Spread betting, or spread trading, offers some interesting features and is worth considering.There are downsides to all forms of investing and with spread bets you need to be especially careful because you can lose more than your original stake.If there is a risk then why should you consider spread betting?Whether you have an existing investment plan or not, it always worth considering any avenue that offers quick, simple access to the markets and a range of tax-free* advantages. Spread betting is one such avenue.There are several benefits. Spread Betting is Tax Free (no capital gains tax, stamp duty, income tax). Also there is no capital gains tax, no stamp duty or and income tax on spread bets*.The simple breadth of markets makes spread betting an investment option. Spread betting companies tend to offer thousands of markets from UK and US Equities to spread betting on Gold, Oil, Coffee and Dollar / Yen rates.So whilst there are positives, it is important to understand the negatives. Spread bets carry a high level of risk so you should only speculate with funds you can afford to lose. Before trading, please ensure that spread betting matches your investment objectives, familiarise yourself with the risks involved and, if necessary, seek independent advice.Are there other aspects that need to be considered? I have seen many trading tips over the years, some more useful than others. Here are three of the more common ideas.Tip 1) Plan each trade. Ensure you are trading the markets you know. Understand at what point you want to close your trade if it goes wrong. Make sure you know the profit level you are looking for and close your trade when it hits that level. This will help you close your bet and also help you control any greed factors.Tip 2) You should stick to the markets you know. If you know little about the US Stock Market but have a good understanding of the UK Stock Market then you are probably better off trading the FTSE 100 Index and leaving the Dow Jones. It is surprising how many investors ignore this rule and want to ‘have a go’ at another market.Tip 3) Greed can be your worst enemy when trading. It can be tempting to trade lots of positions in lots of different markets. Personally, I tend to trade 0–5 markets at any one time. I have no idea how anyone can fully research and make informed decisions on 20 open trades, especially if they start moving against you.So where to spread bet? Make sure the spread betting company you trade with is Authorised and Regulated by the Financial Services Authority, this generally ensures a certain level of quality. It also offers a degree of customer protection.* According to current UK tax law, if you pay tax in another jurisdiction this may vary.

Spread Betting on the Financial Markets

admin — Sun, 25 Oct 2009 02:48:59 +0000

Are you looking for a safer entry route in the capital markets? In the last few years there has been a lot of innovation in the financial markets; some good, some not so good. So what markets to trade and, more importantly, how to trade them?One option is spread betting, in the past this form of trading has had a reputation of letting you make quick profits and even quicker losses. It was always a bit of a rollercoaster. The leading spread betting companies have now introduced a number of ways to help to restrict your losses. Spread betting is a quick and tax free* method of trading and, therefore, it does have its appealing aspects. These days though, with financial spread trading, you can limit your downside. Of course, as with all investments you should exercise more than a little caution.Spread betting on the financial markets offers more than just tax based advantages. For example, you can enter into a trade to buy or sell shares without actually owning them. So if you think a share will perform poorly you can speculate on it to go down. This is also known as ‘shorting’.You can also bet against a wide range of other markets eg you can spread bet on Gold, Crude Oil, the FTSE 100, Dollar/Euro, Pound/Yen etc to go down. Naturally, you can also speculate on these markets and thousands of others to go up.Personally, I also like the fault that the whole process is regulated in the UK by the Financial Services Authority. This helps ensure your funds remain safe.If you financial spread bet, the range of possibilities is quite impressive and growing by the day. As you can see from the above, you can trade shares, forex, commodities and indices. More recently you have been able to trade bonds, interest rates and even house prices. Financial spread trading is based on speculation of the future movements of the markets. Hence there is an inherent risk associated with the decisions you may undertake. However, there are various methods available in order to reduce your risk. One such option is the Guaranteed Stop Loss order. This is an automated order that ensures that your losses are limited. It can also be wise to trade in small stakes as this is a simple way of reducing your risk.Note that spread betting carries a high level of risk and may not be suitable for all classes of investor. Only trade with money that you can afford to lose. Make sure you fully understand the risks involved. If necessary, seek independent financial advice.* Tax law is subject to change and may differ in jurisdiction outside Ireland or the UK.