LONDON, June 22, 2011 /PRNewswire/ --
Spread betting and CFD trading are both free of stamp duty, with spread betting also exempt from Capital Gains Tax*. This makes them very attractive options for those new to trading, or anyone who want to make their portfolio work harder for them. Here, provider City Index (http://www.cityindex.co.uk/) offers advice for those new to spread betting and CFD trading.
Watch your margins
Many traders use up their margin with a single opening trade. The reason this is detrimental is that it leaves you with little surplus in your account to allow for price fluctuations. Always hold back extra margin to cover your position should the markets go against you, or your trade could be closed out.
Place stop losses
You can place stop losses to close your trades at set price points, therefore never risking more of your capital than you intend to. Though there is a small additional charge for a guaranteed stop loss, it will never close your trade any lower than the level at which you set it.
Avoid large individual trades
If you place a large spread bet or CFD trade in one market, your success or failure depends solely on the movement of that one market. Spread your trades and you will diversify your risk.
Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
* Spread betting and CFD trading are exempt from UK stamp duty. Spread betting is also exempt from UK Capital Gains Tax. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, many of them discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades in over 50 countries every month. We provide access to many instruments including CFDs and financial spread betting.
We constantly look to improve our platforms and expand our range of services. The result is that our customers benefit from innovative financial trading tools with transparent pricing, competitive spreads, award-winning mobile trading apps and a high standard of customer support.
SOURCE City Index