Which Spread Betting Company?

But with so many spread betting brokers in the market, and more being added every year, how can you choose which one(s) to go with? Here is a guide to what is important, that will allow you to focus on what matters.

Before you can spread bet, you need a spread betting account. The choice of spread betting provider that you use can make a difference to the amount of your profit, or whether you make a profit at all. While most companies struggle to remain competitive with each other, it is worth checking around to find the best deal.

Cost is an important consideration when you are looking for a spread betting company, particularly if you are an active trader who is going to be doing a lot of deals. In spread betting the cost takes the form of the bid-offer spread so narrower spreads are generally better.

You also want a spread trading company that allows you access to a wide range of markets or instruments, for example offering a broad selection of international equities on top of London-listed shares.

The first spread betting firm was IG Index, way back in the 1970s, but it was only in the late 1990s that the spread betting market really expanded. It can be useful to have accounts at more than one spread betting company so that you can check on the tightness of the spreads, and any new products being offered, and sometimes you may find that one company accepts bets that another is refusing.

The spread betting brokers that you choose must be selected on your personal preferences, and on your intended way of spread betting. You will not find one spread betting provider who consistently beats all the others, as competition dictates that one cannot dominate the market all the time. Factors that are important to check include: –

• the range of products,
• are the specific products you are currently planning to trade available,
• how tight are the spreads, particularly on your intended instruments,
• how automated is the website, for example does it automatically set stop orders,
• how easy is the software to use,
• what extras are offered online, such as training courses and news feeds,
• if you are off-line, how good is their telephone trading service,
• how good is their bet execution,
• is the customer service available and knowledgeable,
• are there any other benefits, such as paying interest on your deposited funds?

Of all of these factors, the most important must be whether the products that you want to trade are available, but the tightness of spread is also extremely important. It is possible to live with an inferior trading platform as long as you have the tightest spreads so that you are retaining as much as possible of your profits.

As an action plan for picking your spread trading brokers, first you should look through the marketing literature and the advertisements to determine the key players that you want to research. Then visit their websites to see which ones appear best and to check out the product ranges offered.

From this initial short listing, draw up a comparison of the size of spreads. It can be worth looking to current customers, but you should beware of comments posted on forums and Internet bulletin boards for two reasons – firstly, just one disgruntled customer out of thousands can make a lot of noise which may not be justified, and secondly it has been known for brokers to arrange for good comments to be left. After you make your decision, you can open more than one account, for flexibility.