Make Money Trading Online

Archive for July 2nd, 2010

The are lots of ways to trade and FTSE spread betting is one of them. It has its positives and negatives as does any other trading method. I want to take you through a few of those now. I aim to give you a fair view of both sides so you can draw your own conclusions as to whether it is something that you want to pursue.

So what it FTSE spread betting? Well you will be trading or ‘betting’ on the movement of the FTSE. This is a well known index in the UK made up to large firms. You therefore aren’t really interested how shares do on an individual level. You are more concerned with the overall movement of the market.

So what if I am in a position where I like to invest on a company level? Well in that case then FTSE spread betting is probably not for you. You may want to open a stockbroker account where you can trade individual shares or take advantage of financial spread betting areas.

How do trackers compare to FTSE spread betting? Even though they are based on the same index the are totally different. A tracker is a great option for those people who do not really want to take an active position in their trading.

So if the tracker is potentially better for most people then why should I consider FTSE spread betting? Well FTSE spread betting has a number of advantages. Firstly you don’t have to pay tax on your profits. If you hold trackers in an ISA then this is potentially true for profits.

The other advantages include access to lots of markets from the one account, you don’t have to pay commission and you can use leverage to assist your position. Please note that using leverage can be risky.

If you are unsure of any of the tax rules or whether that FTSE spread betting is for you then make sure that you speak to a financial advisor before trying it.

Tweet This Post

Futures plus options are spinoff products related to the stock plus commodities markets. Nearly all options are stock options, while futures may correspond to a stock market index or a particular commodity such as grains or beef. Each instruments are highly leveraged. The risks associated with futures plus options are considerably greater than with stocks. This additionally ends up in bigger potential rewards, but no trader should engage in futures or options trading without a clear strategy.  

The Dow Theory is a idea for recognizing trends in any monetary market. It is simply not itself a strategy, but numerous trading strategies use the Dow Theory for their entry signals. Costs are continually fluctuating up and down in any financial market. The Dow Theory indicates a trend when the up swings in a price lead to a new high, while the down swings end at a higher low. This repetition is the common pattern in any market, and futures traders can profit when properly coming into a trend. To reduce risk, the best entry in an up trend is after costs have declines off a new recent high. Obtain the future prior to prices reverse and create another new high. If prices fail to reverse and the overall trend breaks, you’ve minimized your risk by not buying at the very best price. The trend has broken if the following low is lower than the previous low.  

Options are significantly versatile investment instruments. In contrast to stocks or futures, an option position may profit from the degree of a price move rather than the direction of the move. Thus a single option trade may be profitable even if the underlying entity considerably rises or falls in value. The “Long Straddle” is a common strategy in option trading for this purpose. All options fall beneath two categories: “Call” options increase in worth when the underlying entity rises, whereas “put” options increase in price if the underlying declines in price. Options offer extraordinary leverage plus returns of 1,000 percent are not uncommon. Thus, by buying each a call plus a put on the same underlying stock, the loss of 1 is dramatically outweighed by the massive returns of the other. This is known as “straddling” a stock. The strategy is well-liked before corporate earning reports or FDA approvals when one day may cause dramatic but unpredictable reactions one way or the different for a stock.

Tweet This Post