Spread Betting Account Reviews
Comparing and choosing a Spread Betting Broker is much more difficult these days because of the increased competition
. Below I have listed my Top 10 criteria in order of priority. This list is for sure arguable and rightly so, priorities will be different from one person to another and will change with experience.
1. Regulation
The most important factor and priority number 1. If the broker is not regulated I am not interested. As with any organization you place your money with, you need to make certain that it is protected and that it is as safe as possible. As a minimum your broker should be FSA regulated.
2. Reliability
Everybody relies on the internet now and we take it for granted that any service we wish to access will be accessible 24x7, the same is now expected of a broker.
Pick a reputable broker, they will by and large only be well known if they have proven to be consistently dependable across a sizeable customer base.
3. Markets/Availability
I generally only trade the highly liquid and widely offered Foreign Exchange and Indices markets. For this reason I can be reasonably confident the instruments I will want to trade will be available, if not it will be quite a poor broker and Therefore can be avoided.
What I do check though is that the instrument is tradable at the times I wish to trade it. This does not simply mean the times I wish to place orders it also means the instrument has to be on offer at times when I may perhaps wish to exit a position or when I might expect a Stop/Target to be honored.
Therefore, for me, as I often hold Foreign Exchange positions overnight with a Stop and Target in place it is meaningless for me to have a broker that only offers the Foreign Exchange market from 06:00 to 22:00. I need a broker that provides 24 hour execution.
4. Interface
What's key here for me is; Ease of location of instruments, effortless order/trade entry and efficient trade management of open positions.
It is absolutely essential to me that I can easily find the instruments I want to trade and be able to set up orders/execute a trade (with Stops and Targets defined (I never trade without them)). I also need to be able to monitor and amend those open positions, gauge my exposure, move Stops, etc. Without constant screen watching or feeling nervous when I am not at the screen.
5. Execution
Efficient execution is very important. I need execution at the price I specify and for it to happen within seconds. Yes, slippage is an accepted overhead of trading but it is not one that should be tolerated. I would expect less than 5% of my trades to incur slippage, any more than and I would be reconsidering my broker.
6. Spread
Not as key as it used to be. With the increase in competition it means that for the highly liquid instruments I usually trade the spreads are now quite uniform across most brokers.
7. Support
It is critical to know that the broker has a sound support infrastructure. Again, this can be checked on the internet (forums, etc.) for general consensus but at least once a quarter I put it to the test.
Always know how to get in touch with your broker, email, phone, online chat, instant messaging, etc. Ensure you know what these details are and have them to hand. I keep them printed in large font on the nearest wall.
Do not learn this lesson the hard way!
8. Charting Package
Some may find it odd that this is almost last on my list. However, the reason is quite simple, I am already happy with the Charting packages I have. I have used them for years, I am familiar with them and they provide everything I need for my day to day trading. Accordingly, when looking for a broker the Charting package they provide has no real relevance on my decision making process.
I have found that by the time The majority of traders get to the "reasonably experienced" stage, they too will already have their established Charting package(s) of choice.
9. Guaranteed Stops
As I by and large trade Forex or Indices with brokers who accommodate 24x7 trading Monday to Friday, I tend to accept the risk of intraday market gaps rather than paying the price of an increased spread for a guaranteed stop. This is a matter of personal choice based on ones attitude to risk and acceptance of the increased spread that comes with guaranteed stops.
10. Additional Functionality
Although this is the last on my list, it could well be number one these days. Increased competition has meant that Most brokers now offer and satisfy many of the above requirements by default. They have to or they would not be in business.
For me, my preferred broker, IG Index, provides me with "value add". They provide; "Stepped" trailing stops, the ability to place market orders close to the current market price and an Advanced Charting package which is my Charting package of choice.
Additional functionality is a "nice to have" and it is number ten on the list simply to make a point that you should never stop looking around, every year or so, for a broker that may better suit your needs. Most are rolling out new functionality more often than not and some offer reasonable incentives to encourage you to try their new functionality.
Final Words
I hope the above has been useful and as I mentioned in the introduction, this list is arguable and I welcome others views on the subject. You can also view and comment on our experiences of various Spread betting companies out there as well as reading other traders comments too.
by: TatianaU
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