Research: Before you place a bet do your home work. You may find a spike in the share price or the god’s may look favourability upon you from time-to-time. But for long term success do you research and understand completely what you are doing before departing with your cash.

You will lose: Everyone loses occasionally, learn from these loses and alter your strategy and decision making process so you won’t make these mistakes again. Consider using stop loses to help you minimise your exposure. Decided upon your maximum exposure before placing the trade, during the heat of the moment you may find that you get carried away with watching the market tick away in the wrong direction.

Familiarity: Don’t try betting with stock you know nothing about, stick with markets you know and understand. It does get boring placing bets upon the same old stock but the goal is to make profit. When you have some knowledge of the markets only then should you move on.

Keep some back: When you make some profit, consider withdrawing your initial capital to allow you to continue to spread bet even if you have a bad spell – Don’t get disheartened and get back on that horse.

For more hits and tips for view the financial spread betting guide on  http://spreadbettingbeginner.com/

Traders behaviour has altered from using the web/phone to increasingly using mobile trading platform, and this trend is only likely to grow some more.
City Index were one of the first mobile trading apps on the market and won “Best Mobile Trading Platform” back in 2009 but they are under increasing competition from GFT Markets who launch their own iPhone (DealBook) app in Jan 2010. These apps not only allow you trade but contain real time charting and news feeds keeping you up-to-date with the markets.

IG Index now offer their award winning PureDeal on a range of smart phones allowing you to also do everything you can do on the web. including Stop and Limit Orders, with live data feeds and charts.
When most of the platform’s were launched execution time was a concern but generally if you’re trading on your phone execution time of 150milliseconds isn’t a problem when it’s going to take you 15 minutes to run back to your desk from the restaurant. Having a mobile for checking positions and prices is a must. If you have a full time job and what to spread bet, mobile trading is the way to go and likely to be the future.

The forex market is full of pseudo-brokers on one hand, and expensive ECN brokers on the other. ECN forex brokers are great, but generally require more money in order to open a new account, and they all charge on the ‘Carry’ trade, which can often be very expensive, even for a minor interest rate differential.

This is where spread betting came in handy, many good spread betting firms in the UK, will offer quarterly contracts on all the major currency pairs, unlike ECN brokers there are no interest charges, and you are effectively trading the forex market in a cost efficient way. Spread betting firms are generally not suitable for trading in big size or for scalping, but they are okay for just about anything else, and better in terms of cost compared to ECN brokers. Spread betting is perfect for position /swing trading the forex market, and the savings on interest can be massive overtime.

How does it work?
The spread betting market is a kind of market maker broker, when you buy $10 per pip on EUR/USD your order may or may not reach out to the rest of the world, if another client is has sold $10 per pip on EUR/USD your orders will be exactly offset, and no order will leave the spread betting company, if you bought $12 while the other client sold $10, then $2 would reach out to the market.

All in all, the overall structure of the Spread Market Makers involves placing bets among themselves (the spread betting firms among themselves), this market is quite large, and at some point it is connected to the real forex market, or stock and commodity market if you are trading those.

Spread betting with a good firm is absolutely safe, and the savings for the beginner or small trader are enormous in the long run. If however you are successful in your trading, and wish to make large trades in the long run you will have to progress from Spread betting firms to actual ECN brokers, because Spread betting firms cannot handle big money trading, at least not as profitably as ECN brokers.

How they are priced:
Stock Options are priced in a complex way, so that their premium (the price you pay) reflects market volatility as being risk to the option seller, much like the way that car insurance premiums vary from driver to driver, and they too reflect the individual driver’s risk, to which the car insurance company is exposed.
When a stock becomes very volatile, it is viewed by the option pricing formula as more risky, and therefore its option premium rise, so as to better reflect this increased risk from the perspective of the seller of the option.

Stock Options are characterised by their strike price and a Call Option makes money when the stock’s price rises above the strike price, whereas the Put Option makes money when the stock’s price falls below the strike price.

Options are priced by an overall premium, which is made out of intrinsic value and extrinsic value. An Option only has intrinsic value if the price of the stock has favourably passed the strike price level as explained earlier. The extrinsic value part is made out of the decaying time premium (options are decaying assets), and the implied volatility premium (or risk premium as explained earlier).

What’s unique about stock Options?
Most people tend to think that option trading offers great leverage, and limited risk, because when you buy options all you can lose is the prepaid premium. While this is true and options do offer great leverage if one trades stocks in the near term, they can only be profitable if the option starts to trade in the money (those that have intrinsic value).

Another great reason for trading options is their asymmetrical Risk/Reward ratio, if one for example trades deep in the money Call options on a stock they stand an overall better risk / reward ratio:

If the investor invests $10,000 in a stock, they stand to make a dollar for dollar gain or loss, depending whether the stock rises or falls.

With a deep in the money Call option, things are different, for example if the stock rises by $1, the investor will stand to make about $800, but if the stock falls $1, they stand to lose only $500. This is the asymmetrical R/R ratio of options, you gain $800 if things go well, but you only lose $500 of intrinsic on the downside.

Generally, options are hard to learn to trade because of their parameters and complexity, but once mastered they can offer a better alternative to trading stocks, or at least stocks on their own. Options contracts can have a lengthy expiry date, sometimes years in the future, and despite being decaying assets, if one buys in the money options, the time decay loss is minimised significantly, while gaining enormous leverage and better Risk / Reward ratio in their investments.

The two significant impairment charges were approx. £3.2m each, the first relating to the write-down of its software asset, and the second was a result of an unfavourable ruling made by the Financial Ombudsman Service (FOS) in relation to errors made on customer statements in first half 2009. As a result of these “one-off” charges no final dividend was declared.

Going into 2011, LCG recently lost Paddy Power as a white label partner but maintains some significant names such as TD Waterhouse, PartyGaming, Tradefair and SaxoBank.

On the positive, revenue was up 25% and they have strong cash flow from their core business. They have also been independently recognised as the second most significant provider in the financial spread betting arena in the UK.

Overall, while the results are disappointing the “one-off” impairments shouldn’t impact LCG results going forward. The average number of trades per day is up 22% and client retention has been strong, which implies that their trading platform is favoured amongst spread bettors, the financial products offered are diverse and the spreads are competitive.

Similar to car insurance, buying Put options can be viewed as insurance against the downward moves in the market. You pay a premium upfront for protection of catastrophic event, over a time period.

Buying options can be the cheapest and most effective way to protect your portfolio and/or make money from unexpected events. Out of the money options with a long maturity date is possibly the best way to do this and are particularly cheap during periods of low volatility. Out of the money options, are those which have a strike well below the current spot price e.g buying a 5000 put option on the FTSE, when the FTSE is trading at 6000, it becomes in the money if the index price moves below the strike of 5000.

During “uneventful” periods, volatility in the market falls and the price of an option becomes cheaper. This is probably the best time to take a sceptical view that something could happen in the futute. With an option the maximum you can lose is the premium, so your downside risk is capped.

Most of the spread betting firms offer options on main indexes and stocks, but the price you pay does vary between them, so it pays to shop around for the tightest spread, in a similar way you would shop around for the cheapest car insurance.

Refer to the Learning Zone for more information on options.

There are four stations showing a range of broadcasts from the basics of spread betting to trading strategies and the latest market news. Its a great way to keep up-to-date with new tools and improvements to the IG platform. One of the channels presented by David Jones, IG Chief Market Strategist, demonstrates the features of the PureDeal platform in great detail.
This channel should be bookmarked for future reference, and can used by most spread betting investors looking for trading tips.

The on-line channel can be found at -
http://www.youtube.com/IGIndexSpreadBetting

Any positions that remain open will be closed-out at the closing price on 11 February by CMC automatically. Some dealers fear that with CMC moving away from this market could have ripple effects on on the physical AIM market.