Below are five of our most commonly asked questions.
We show you how to trade shares on-line via spread betting taking risk minimisation measures seriously. With Enders & Power you can understand the mechanics of spread betting, take a view on which way the price of a company will go and back your judgement whilst at the same time minimising your risk (how much you can potentially lose).
Unlike your traditional method of investing in shares, you never own the actual share or commodity. It is the underlying asset you are making a judgement on, however, you are simply making a call on whether you think it will go up or down in value. You stake a certain amount of capital per point movement – the more it moves in your favour the more money you make and vice versa. So beware that the more it moves against your prediction, the more you lose!
Many of us will already keep a close eye on shares we hold as investments so it makes sense to employ leverage in order to increase your profits if you have a particularly strong view on which way the price of a specific share of a company will go. This method of trading also comes with the risk of magnifying your losses but, you can also magnify profits and not have to pay stock broking commissions when you trade. You pay what you call a spread every time you open or close a position which can be considerably more cost effective.
In simple terms in the same way you would with conventional shares, by employing a stop-loss. Many platform providers will allow you to take out a guaranteed stop-loss meaning you can exactly define the amount of money you are willing to lose.
The amount of capital required by spread betting companies to be in a client’s account to keep their positions open after a price moves adversely against them. Sometimes called variation margin.
