Spread Trading is a way of trading the financial markets which
allows you to speculate on not just whether a market will go up in
value, but whether it will go down in value as well. With Spread Trading
you trade on ‘Margin’ – that is you can leverage your position to trade
the equivalent of a much larger physical position and only need to put
down a small percentage (typically 1-5%) of the capital required to
trade a normal physical position.
With Spread Trading you do not actually own any physical asset – if you buy a Spread Trade on Barclays’ shares, you do not actually own shares in Barclays, you are merely speculating on the movement in the Barclay’s share price. The price you trade with Spread Co is based on the underlying price of the shares in the market, with a small ‘spread’ added on to it.
So if Spread Co quotes a spread of 214.1p – 215.1p for Barclays, you can buy Barclays at 215.1p, if you think the shares are going to go up. Conversely, if you think the shares are due to fall you can sell at 214.1p.
With Spread Trading you do not actually own any physical asset – if you buy a Spread Trade on Barclays’ shares, you do not actually own shares in Barclays, you are merely speculating on the movement in the Barclay’s share price. The price you trade with Spread Co is based on the underlying price of the shares in the market, with a small ‘spread’ added on to it.
So if Spread Co quotes a spread of 214.1p – 215.1p for Barclays, you can buy Barclays at 215.1p, if you think the shares are going to go up. Conversely, if you think the shares are due to fall you can sell at 214.1p.
