The Financial Spread Betting Handbook, 3rd edition

The definitive guide to making money trading spread bets

Malcolm Pryor

• Publisher: Harriman House
• Year: 2017
• eBook ISBN: 9780857195968
• Edition: 3
• Topic: Business
• Subtopic: Financial Accounting
• Index: Business

FULLY REVISED AND UPDATED THIRD EDITIONFinancial spread betting is a huge industry. But who wins and who loses at this game? What do the winners do that differs from the losers? That is what this book is about.Malcolm Pryor uses the model of climbing a mountain to explain a disciplined, winning approach to spread betting. First a base camp must be established. This includes getting set up with the right corporate data, charting and accounts software, deciding what to bet on and what your time frame should be, learning the nuances of operating an account, controlling risk, and learning from other people's mistakes. Many spread bettors don't even get this far.Next, we start climbing the mountain; this means having strategies that are right for us. The whole of this section is devoted to illustrating strategies which can be used for spread betting, for example trend following, counter-trend strategies and delta-neutral strategies such as pairs trading.Finally, we make our assault on the summit of the mountain. This is where the winners set themselves apart from the losers. Issues covered here include trade planning, record keeping, performance reviews, more on risk management, psychology and continual development.In this substantially revised and enhanced third edition, you will benefit from:- Updated details about computer hardware, trading software and price data products to reflect technological changes and new products coming to market.- Updated information about product spreads to reflect the changed spread betting and market environment.- Refreshed and improved information about spread betting firms' product offerings, order types, and approach to pricing and hedging.- Numerous other revisions and improvements throughout, to bring everything up to date and enhance clarity.Spread betting is great fun; almost anyone can enjoy the odd bet now and again. But if you want to make money from spread betting then it must be taken seriously and a disciplined, tactical approach is required. This book is the essential guide to get to the top of the mountain.

Part 1. Base Camp

If we want to climb the mountain called Spread Betting, our first task is to reach Base Camp. Getting to Base Camp means we will have the requisite background knowledge and resources to start spread betting. More specifically, we will know how to select a spread betting firm; we will have identified the resources we need by way of hardware, software, price data, information and websites. We will have formed a view on what underlying instruments we wish to bet on, and have an understanding of the various spread betting products on the market. We will have respect for the dangers of spread betting and understand where many spread bettors go wrong. We will have enhanced our safety by appreciating the merits of stop losses; and we will have a good understanding of the various methods of entering and exiting bets. When we get to Base Camp we will already be better equipped than many spread bettors.

1. Choosing A Spread Betting Firm

Before we start to spread bet we need a spread betting account. This chapter provides a little background to the spread betting market and then looks at how to select a spread betting firm. If you are an experienced spread bettor with more than one account you may find you know most of this material and can whizz through it.

Origins and growth of the market

IG Index – the first spread betting firm

The first spread betting firm was IG Index, who set up a facility in 1974 for people to bet on the price of gold (when there were restrictions on buying gold outright). They also introduced betting on a number of other financial instruments.

Over time, other firms entered the market and the range of the futures-style products on offer expanded. Sports betting was also introduced. The spread betting market expanded rapidly from the end of the 1990s as both demand (new customers) and supply (new spread betting firms) increased.

Deal4free introduce rolling daily bets

The market changed quite significantly when Deal4free (today trading as CMC Markets) entered it. Firstly, because they had an open and...

Table of contents

• Contents
• Preface to the 2017 edition
• Preface
• Acknowledgements
• Risk warning
• Introduction
• Part 1. Base Camp
• 1. Choosing A Spread Betting Firm
• 2. Getting Set Up – Computer Hardware And Software
• 3. Trading Resources
• 4. What Do Winning Spread Bettors Bet On?
• 5. Choosing A Spread Betting Type
• 6. Timescales For Spread Bets
• 7. Pricing And Hedging
• 8. Ten Common And Really Expensive Spread Betting Errors
• 9. Keeping Losses Small – The Stop Loss
• 10. Spread Betting Order Types
• 11. Practical Issues
• Part 2. Climbing The Mountain
• 12. Finding A Strategy That Works For You
• 13. Spread Betting Strategy I – Betting On A Trend – Trend Identification
• 14. Spread Betting Strategy I – Betting On A Trend – Selecting A Bet
• 15. Spread Betting Strategy I – Betting On A Trend – Bet Size
• 16. When To Exit A Bet
• 17. The Re-entry
• 18. Spread Betting Strategy II – Betting On Reversals
• 19. Spread Betting Strategy III – In And Out Within A Day
• 20. Advanced Strategies
• Part 3. The Route To The Summit
• 21. The Right Strategy For You
• 22. Staying In Control – Planning
• 23. Staying In Control – Record Keeping
• 24. Staying In Control – Regular Reviews
• 25. Staying In Control – Risk Management, Again
• 26. Developing A Winning Attitude
• 27. Continual Development
• Appendices
• Examples of Basic Bets
• Spread Betting Glossary
• ADX
• Support and Resistance
• Betting via Exchanges
• Index