Spread Betting - Tips for Hedging Your Bets
If you spread bet then you will be fully aware of the risks involved with it. For example the facility of leveraging that allows you to place bets larger than the amount of money you have in your account can literally wipe you out in next to no time.
Hedging your bets is extremely important, especially if you are likely to place high wagers. So what ways can you go about hedging your bets? This short guide aims to highlight the most important.
1. Monitoring you open bets. OK, so this mind sound like a straight forward and common sense thing to do but it might surprise you to hear that the majority of people don't. Markets can change dramatically (in the time I have spent writing this and one other article, the April daily future price of Brent Crude has increased by 2c) and you MUST monitor your open positions. If you are going to leave the house for any prolonged period of time either:
- Close your position
- Load up you iphone app
- Open the bet again with a stop loss (see below)
2. Stop Losses. This is truly a great tool and one that you should implement as often as possible (especially if you are disappearing away from your computer!). A stop loss in a facility that will automatically close your spread betting position if the price falls to a point that you have predetermined. It can 'stop' you losing considerable sum of money and really is a blessing for the spread bettor.
3. Understand your maker. It has been said time and time again but knowledge really is power. Specialise in one market, say metals, and stick to that. it is impossible to be informed adequately on all the spread betting markets available to you so don't even try to be!
If you spread bet then you will be fully aware of the risks involved with it. For example the facility of leveraging that allows you to place bets larger than the amount of money you have in your account can literally wipe you out in next to no time.
Hedging your bets is extremely important, especially if you are likely to place high wagers. So what ways can you go about hedging your bets? This short guide aims to highlight the most important.
1. Monitoring you open bets. OK, so this mind sound like a straight forward and common sense thing to do but it might surprise you to hear that the majority of people don't. Markets can change dramatically (in the time I have spent writing this and one other article, the April daily future price of Brent Crude has increased by 2c) and you MUST monitor your open positions. If you are going to leave the house for any prolonged period of time either:
- Close your position
- Load up you iphone app
- Open the bet again with a stop loss (see below)
2. Stop Losses. This is truly a great tool and one that you should implement as often as possible (especially if you are disappearing away from your computer!). A stop loss in a facility that will automatically close your spread betting position if the price falls to a point that you have predetermined. It can 'stop' you losing considerable sum of money and really is a blessing for the spread bettor.
3. Understand your maker. It has been said time and time again but knowledge really is power. Specialise in one market, say metals, and stick to that. it is impossible to be informed adequately on all the spread betting markets available to you so don't even try to be!
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