Spread Betting: The Ideal Alternative for Short-Term Traders?

LONDON, February 23, 2012 /PRNewswire/ --

With a wide range of spread betting markets to cater for your various trading needs, you are sure to find one that focuses on minimising your dealing costs and helping you maximise your trading potential.  

Spread betting is most suited to four different types of traders; the day trader, and the short, medium and long-term traders.

Here, Joshua Raymond, Chief Market Strategist at City Index explains: "There are contracts that you can spread bet on if you have a long-term time horizon. But the majority of traders use spread betting predominantly for short to medium-term trading as spreads are much tighter for shorter-term contracts." 

"The times that spread bets are typically open for, range from a minute by minute basis to a quarterly basis," states Raymond. "Certainly very few are left open for longer than six months." 

If you're wondering which form of trading most suits you, read our breakdown below of the different types of spread bets available through City Index, along with their spread betting tips.

Day Spread Bet Trader

The Day Spread Bet Trader trades multiple positions during the day which typically last between minutes and hours, looking to profit from small moves in the market.

Generally, this form of trader trades on technical levels and financial market news across markets such as Day Trade Bets and Daily Rolling Bets.

Short-Term Spread Bet Trader

The Short-Term Spread Bet Trader trades few positions through the week, typically lasting from one day to a week.

Basing trades on technical levels and financial market news like the Day Spread Bet Trader, they look to profit from market movements of 1-5% across Daily Rolling Bets and Monthly Future Bets.

Medium-Term Spread Bet Trader

The Medium-Term Spread Bet Trader generally takes only a few positions throughout the month, trading between 2 weeks to a month with the aim to profit from market moves of between 5-10%.

Whilst like the above, they base their trades technical levels they also base them on fundamental analysis across markets such as Monthly Future Bets and Quarterly Future Bets.

Long-Term Spread Bet Trader

The Long-Term Spread Bet Trader is very similar to its Medium-Term Spread Bet Trader counterpart.

However, they take only a few positions throughout the quarter, typically trading lasts between 1 and 2 quarters, looking to profit from moves in the market of 10% or more.

Like the Medium-Term Spread Bet Trader, they base their trades on both technical levels and fundamental analysis across Monthly Future Bets and Quarterly Future Bets.

Summary

Spread betting can cater for a range of trading needs; from day traders to medium and long-term investors, City Index offers a range of different markets to help traders minimise dealing costs whilst maximising their trading potential. 

Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting.

We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk/ for details.