1 0 Tag Archives: profits
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Financial Spread Betting Compared To Share Dealing

You are into financial spread betting due to the various advantages it provides over conventional stock trading. It is therefore in your interest to ensure that you look at all possible opportunities to reduce costs so that every transaction you make gives you the best return possible. Considering that the number of trades is generally more frequent in this type of trading, even small savings can mean a lot over time.

You must therefore choose a company which allows you tight spread. Wider spreads would erode your profits. Realizing that they are losing customers, some margined trading companies have cut down on their spread and the hope is that customers would get such news from other companies on other instruments as well.

It is worth nothing here that a small spread does not necessarily mean a trade that is cheaper. You have to consider slippage, the chances of a re-quote and other complaints. Similarly, the margin amount that you have to pay with different spread betting companies would be different and you could negotiate for something that is convenient to you. Some companies increase the margins depending on the market volatility and that is not something you can always keep up to. Hence compare financial spread betting companies based on their policy on margins.

Yet another factor is that of stop losses. The stop loss functionality would ensure that you do not lose more money due to a trade going wrong. However not all spread betting companies offer this facility for free and do charge a fee. This could be in the form of a percentage or a flat sum. Some companies offer this facility only for major markets. Policies on this do differ and that is one more reason why you should get it clarified before signing on with a company.

Though spread betting has been seen as an absolute gambling instrument, it need not be so. It is just another form of trading and people who hold positions over a period of a few days cannot be considered mere speculators as they often tend to hedge their positions adequately. It is mainly the intra-day scalpers who can be put in the bracket of speculators and even a one or two point movement on a stock can be beneficial for them.

Last but not the least, even after comparing the various offers of companies, you must sign the agreement only after checking for any fine print.

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04. Jan, 2011
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Investing in a Bear Market

Currently the share market is in negative but still there is no need to panic because there are some rules to survive in the bear market and these rules would help in returning back to its original position quickly.

Sorry to say, but there are many investor who just could not resist the attraction to experiment in the market, as these investor believe that they can earn good profits because of the short-term price movements. However, there would be some good deals as well but it would be very difficult to recognize and could also give very painful rewards in a bear market.

Bear market as known to everyone particularly to the investors that it is completely different to bull market, not only in terms of price movement but also there are other differences as well that includes:

1. Time Factor:
Bear markets show slow movement of prices provided it is not activated by a crash like the October, 1987. Generally, the price movement in the bear market is slow and reduces gradually.

2. People become poorer:
In bear market there are very few investors who would have the funds and would be willing to invest. Besides broker no one would be interested in trading because the earnings of brokers would have been dried up.

An investor needs to change his mindset if he wants to survive in a bear market, particularly if the bear market has come up after a long-run bull market when everyone would have invested their money on stocks had yielded good returns.

3. Stay happy even if your investment yields low returns
It is the time when an investor earning zero return on his investment must be satisfied because he is better than those who are having negative returns on their investments. It is the time when people used to see their value of investment and stocks falling.

4. You must have cash in hand:
Since most of the investment would give negative returns therefore you must have cash in hand in such time of crisis.

5. You must have diversified your portfolio before bear market or else it’s too late:
It is important that you have diversified your portfolio and by doing this you would have reduced your risk, but if you have not done this until the bear market is reached, then it is too late now.

6. If you have cash, keep it with you:
Many brokers would suggest investing in the market and will say that the market is going to get better, but remember that they are thinking about their own personal fee therefore, it is a better idea to wait and enter the market when others have started investing.

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31. Dec, 2010