Spread betting: five tips for would-be traders

Spread betting stocks can be tempting – but for many, it’s ruinous. Michael Taylor of Shifting Shares looks at how to avoid the pitfalls.

Man looking at computer charts © Getty Images/iStockphoto
Trading is tempting – but always focus on the downside © iStockphoto
(Image credit: Man looking at computer charts © Getty Images/iStockphoto)

The sort of volatility we’ve seen during the coronavirus outbreak tends to draw new traders to the stockmarket like moths to a flame. Spread-betting firm IG Index recently reported an influx of 22,500 clients in just 36 days. The problem is, most new traders are ill-prepared to cope with the realities of trading. Understanding the five concepts in this article won’t turn you into a stockmarket wizard overnight, but it might help you to avoid being the proverbial moth – and give you a better idea of whether trading would suit you or not.

1. Position sizing: don’t bet the house on one stock

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Michael Taylor is an ex-trader. For more from him, see shiftingshares.com.