Trading Futures Vs Spreadbetting
Wednesday, June 6, 2018
Whether you are considering trading financial markets as a sideline venture or as a career move, there are many avenues to explore, including spreadbetting, CFDs, futures, options, cryptocurrencies and traditional bonds and shares trading. Cryptocurrency is hugely popular at the moment and while it can be awkward to get started (changing fiat currency to bitcoin and then to altcoins can be tedious), there are some amazing opportunities and some very good lessons to learn by dipping your toes into the world of crypto trading.
Like cryptocurrency accounts, spreadbetting accounts can be opened with very little capital and the minimum value of the bet can be very small. Spreadbetting firms usually cover a very extensive range of tradeable products from options, to commodities to futures markets and forex. And the ease of use and ease of account opening makes the spreadbetting proposition very attractive. In fact, due to an extremely tight regulatory environment and the resulting lack of innovation from the traditional financial market brokers, spreadbetting has garnered a huge share of public attention when it comes to searching for trading accounts.
The major difficulty in choosing to trade via a spreadbetting account is the fact that the spreadbetting firm are effectively betting against you. They are effectively the casino. The spread either side of the real underlying market price is their insurance against you having a winning trade. For instance, high frequency futures or options traders look to trade the volatility of the busiest markets, essentially searching for and taking advantage of small and short-term market inefficiencies, shoring up the markets in moments of illiquidity. These traders can make a very good living by taking winning trades of just 4 to 5 tick price movements as consistently and fervently as possible, exiting the market within seconds of entering. With spreadbetting, this type of trading is pretty much ruled out. The spreadbetting firm have already charged you the price of these 4 or 5 ticks, meaning that upon entering the trade you are already faced with a significant losing battle.
So for sreadbetting to make sense, you should not be looking for small, consistent winners as these will be eaten up by the spread. You should have less capital than it takes to open a brokerage account ($10,000) and have less capital than it takes to take the TraderDock Challenge ($200 per month). You should be aware that the spreadbetting firm make a lot of money even when 82% of their bettors always lose money.
TraderDock offers futures trading with real-time data from CME. Our partner, Positive Equity, offers futures trading with CME, Eurex, Meff, OMX, and may other global futures exchanges. This professional method of trading provides the trader with direct market access. The trader’s bid or offer will be matched directly with the best bid or offer from other traders around the globe. This element offers an incredibly valuable level of transparency to futures trading. However, as mentioned, the lack of innovation and stiff regulations means that the barriers to entry in the futures arena have been set incredibly high.
Globally, there are not many firms like Positive Equity, providing financial backing to traders and taking a profit share of their success. The firm only survives if their traders are successful. TraderDock is honoured to team up with Positive Equity in tearing down the remaining barriers to earning the financial backing of a pro trading firm. Through the TraderDock Challenge, TraderDock will make new market professionals every month, trading from home, taking up to 80% of the trading profits with zero personal downside risk! Start the TraderDock Challenge today.