I think it is important to spread your spread betting across a few different providers. So it you are using one or more of the spread betting brands run by the London Capital Group (fine though they are, and if you don’t have one then you should get one) then you might want to look at one of the other entirely separate providers such as SpreadEx.
What I like most about SpreadEx is the fact that they provide guaranteed stop orders that cap your risk at an absolute level, and that those stop orders (guaranteed or not) are shown right alongside your open positions as shown below. It’s a useful feature to have when running my Position Trading strategy.
SpreadEx also offers one of the widest ranges of individual equity markets, and credits a greater proportion of dividend receipts than most other providers. These too are important factors when Position Trading.
Spread Betting Advice from SpreadEx
Want to know what advice SpreadEx has for new spread bettors? Here’s the advice that David White offered as his contribution to my Better Spread Betting book:
When looking to spread bet a trading idea, research the product to determine the asset’s normalised volatility relative to the broader market – i.e. its beta.
Using as much leverage as your provider will allow will magnify the volatility of a historically volatile instrument, to the point that it becomes unmanageable. High gearing could result in your position being closed through lack of funds from only a small change in price, regardless of whether the trade proves profitable over your set time horizon. Conversely, gearing up by using leverage on a less volatile instrument can help you generate bigger returns from smaller price moves (relative to the broader market) while still meeting the demands of your risk profile.
If spread bettors can differentiate between products which are inherently volatile and those that aren’t, then the ability to both see a trading idea through and to maximise capital efficiency with an appropriate use of leverage will supplement trading success with a more robust and empirical understanding of risk management.
If you like what you’ve read about SpreadEx, check them out: