Ok, so you're ready to set up your UK spread betting account
. The procedure for opening a financial spread betting account is really very straightforward. You either visit the spread betting site, say, City Index and ask for a brochure pack or fill out the online application form. Opening an account is very simple and you can apply online or call their sales team with the whole process taking just a few minutes.
The spread betting provider will want to know if you have any outstanding bad debts and whether you have a fixed address; basically the standard things that you would associate with opening a bank account. It is important for the firm to protect itself and ensure a prospective client has sufficient experience.
What if I have never traded derivatives before, just bought and sold shares?
Defining sufficient experience is really a discretionary assessment. Spread betting providers such as Capital Spreads, Finspreads or IG Index will ask you about your present employment and income to see if you can really afford it. If you are new to spread betting, the broker will refer you to their trading academy so that you can learn more about the product and trade with a demo account for free. They might even allow you to trade with lower stakes for the first few weeks to see how it works and so that you get an idea of the pitfalls and possible problems before committing to more serious sums of money. Most providers will offer a helpdesk that allows traders to ring and speak to a support representative or a dealer for most of the trading day.
So I can trade on the phone if I want to?
Order entries can be placed by telephone or online although there is a preference for the online route since 98% of all trades are placed online. The minimum trade size is usually 1 with most spread betting providers. Investors who deal online will soon understand the inherent advantages.
How do I get money out?
This depends on whether you can receive CHAPS or BACS but with CHAPS, you can have it the same day. It needs to go to your designated UK bank account. For depositing money in you can use CHAPS, BACS or cheque or transfer from one of your other brokerage accounts. Some people tend to move monies from their standard brokerage account or their ISA or PEP.