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Spread trading
(also known as. 'Spread betting') is a new alternative to
standard stock trading brokerage accounts. Most prevalent
in the UK and Europe, Spread trading avoids regulatory and
tax issues generally encountered by stock traders, and allows
every trader to begin stock trading using only a small
percentage of the cash they would normally be required to
stump up as margin. Spread trading companies make their cash
from the 'spread' (i.e. the gap between the bid and the ask),
and no commissions are generally charged over and above this.
For this reason, you need a good win/lose ratio while stock
trading, as the moment you open a stock trade, it is essentially
in the red by the size of the spread. Obviously, if you are
stock trading small amounts, the spread is also small. The
best place to open a spread trading account in our opinion
is TradIndex.
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