Three things to ask your spread betting broker

published 15 November 2011

Choice is usually a good thing; but it can become overwhelming. A good example is the fast growing world of spread betting. With so many brokers offering an online trading platform, which one do you choose? Here are three criteria to help you whittle down the list.

Spreads

The truth is there is often not much between the biggest providers on this score the competition for business tends to mean that bid to offer spreads are pretty similar particularly on popular equity or currency positions. So always be wary of bold claims made in adverts that appear to undercut the competition you need to find out exactly what the deal is.

Also, as Jamie Blake of Capital Spreads comments in CityAM, there can be a difference between the price quoted on screen and the price you trade at. Ideally, the two should be the same. So always be on the look out for a purely indicative price and "find out if you're going to be regularly re-quoted". Also find out whether the spread quoted is fixed or variable and what kind of change you can expect to see should the market suddenly turn volatile.

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Access

Most spread betters want to be able to access their spread betting platform from anywhere and on any device. It's also important to be able to trade when you want. Check both with your spread betting provider before signing up.

Tools

Make sure that your provider offers what you want - ideally, free of charge. Decent charting tools, for example, are important and should be simple to use. If you can't work out how to use a tool fairly easily, then there's something wrong with it, not you!

Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.