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How to Choose Financial Spread Betting Broker
Every financial spread betting trader knows that choosing a reliable and cheap spread betting broker is vital. You wouldn't want to waste all your profits by paying too much in the spreads or get a position you can't exit if your broker's trading system fails.
Five Step for Finding the Best Spread Betting Broker
1. Brokerage fees or spread you pay for every trade
Financial Spread Betting companies do not charge commission or trading fee. In fact the commission is built into the spread, thus making it less transparent for investors and more difficult to compare. Since different markets have different commissions we calculate spread index for every financial spread betting provider to give you a gauge of how cheap or expensive they are. Refer to our financial spread betting comparison service to find the cheapest spread betting firm.
2. Financial Spread Betting Margin Requirement
Financial Spread Betting is a leveraged product, thus you pay only a percentage of the value of the underlying instrument (margin). Margin requirements vary between the brokers, but usually range between 3% and 10%. The margin requirement may be higher and depends on the liquidity and volatility of the underlying market.
3. Their Number of Tradable Markets
The list of tradable markets can vary between the providers, so if you're not sure if a particular market is available contact you financial spread betting provider. Please note that all spread betting brokers provide contracts for difference for the major markets (US, UK, Europe, Japan).
4. Interest Charges for Long Positions Held Overnight
Since financial spread betting is a margined product, you borrow the money from your broker to trade; in return your broker will charge interest for long positions and credit interest for short positions held for more than one day. The rate for long positions is typically 2% about the reference rate (usually LIBOR) and short position's is 2% below.
5. Trading System and Broker Customer Service
Overall customer satisfaction rating provides you with the idea of how good or bad a particular financial spread betting broker is. We take into account trading system usability, easiness to use, reliability and design, it also takes into account broker's customer service and promotions. The higher overall rating suggests better trading system and customer service. Compare financial spread betting brokers by rating.