Types of Spread Betting Accounts

Opening a Spread Betting Account

If you are intending to commence trading the spread betting markets, then you will need to register with a suitable broker and open an account. This article is intended to inform you about the account choices that you will have available whenever you decide to commence this process.

There are numerous brokers providing spread betting services. All you need to do to register with them is visit their website and investigate how to open an account. This process is normally extremely easy enabling you to launch a new trading account on-line in a matter of minutes. Your selected broker will then send you securely a unique account number and password, which you can choose to alter at any time, if you deem fit.

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A number of spread betting brokers will even provide you with a substantial credit line if you can demonstrate that you have the financial means to support such a facility. In order to do so, you will normally have to submit evidence confirming that you possess sufficient cash funds that are at least ten times the size of the credit amount that you are seeking. However, always confirm the precise details of such packages with you selected broker before proceeding further. An alternative approach is simply to deposit some cash in your trading account, which will then be referred to as your ‘margin‘.

Where can you Spread Bet?

You have an extensive list of brokers that you can select from in order to commence trading. You are specifically advised to register with only those ones that are fully regulated. By doing so, you will then provide maximum protection for your trading capital should your chosen broker incur any serious financial calamities, such as going bankrupt.

Also, bear in mind that not every spread trading broker offers a comprehensive choice of assets that you can use to activate spread bets. One firm may offer a market index for example while another may not. However, the range of markets that you can utilize to initiate spread bets is escalating significantly nearly every month.

Once you know what you want to trade and assuming that your preferred assets are not popular choices, then you should check that your brokers of interest support your selections before launching a new account. Even markets, such as small cap companies and foreign currencies pairs, are not serviced by all brokers.

Standard Accounts

This account needs you to deposit funds in your spread betting account before you can start trading. The balance will then be utilized to fund your margin requirements whenever you activate spread bets.  The profits and losses from your spread betting activities will then be added or subtracted respectively from this balance. This balance is referred as either the equity or cash balance.

>> You can compare all of our recommend spread betting accounts here.

Demo Accounts

A demo account is practice account that allows you to trade on the platform using demo money. Most spread betting demo accounts will give you £2,500 – £10,000 in virtual money to trade with. The main advantage of using a demo account is that it allows you to accustom yourself with the trading platform and features without risking any money.

>> You can find a full list a spread betting demo accounts here.

Credit Accounts

These accounts are usually reserved for the more experienced traders. No deposit is necessary. If you are successful in registering a positive credit status then you should be aware that you will be issued with a limit. Any losses causes your account balance to exceed this specified value must be resolved promptly. Brokers who offer this account type will generally demand proof that you possess sufficient cash reserves capable of covering excessive losses exceeding your account limit.  Without this evidence, you will not be permitted to open such an account.

Limited Risk Deposit Accounts

This type of account is similar to the standard account but requires that you will only be able to execute new spread bets if they are backed by ‘Guaranteed Stop Loss Orders’ (GSLO). This means that Limited Risk Accounts can only be operated if an instruction, i.e. a GSLO, to close a trade at a pre-agreed price is specified at the time when each spread bet is initiated. In other words, when opening a spread bet, you must issue a stop-loss order in order to limit the size of your maximum possible loss.

This type of stop-loss order will be guaranteed by the spread betting company under all conditions. In addition, limited risk accounts may only allow access to a limited range of markets and may impose a maximum stake size. Depending on your level of experience and financial situation, you may well be steered towards the limited risk account initially for your own safety. Once you have acquired some experience and skill at spread betting trading, you can always request a free transfer to another account type.

How to Open a Spread Betting Account

The process to fully activate an account with a spread betting broker will take a few days to complete. Once accomplished, you will then often be sent detailed instructions on how to operate your account together with an account number, user name and password, which you will need to access on-line trading. If you have deposited funds by check, you may have to wait an additional day or two for your funds to clear. As a rough guide, you should allow two weeks as a maximum from the moment you submit your application to activating place your first spread bet.

Spread Betting Account

Opening a Spread Betting Account at CityIndex.co.uk

Launching a spread betting account is similar to opening a personal bank account. You will need to provide your chosen spread betting broker with your personal details, such as name, address, contact number, employment and banking details. As processing your application form can take 24 hours or more, you certainly will not be able to start trading immediately. Your spread betting company will want to check your credit history (in the case of a credit account) and verify the information you have supplied them.

Some spread betting brokers, however, may allow you to start trading before the verification process is complete. This can happen if you have applied for a cash account (i.e. the standard account as opposed to the credit account) or if you are looking at starting with a small amount of capital, e.g. £100. Either way, a one or two day difference is inconsequential compared to the important task of selecting an ideal spread betting broker.

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