There are a number of highly reputable CFD providers on the market and most offer spread betting and other brokerage services. When choosing which company to register with there are a number of things you should assess as each company will have an entirely different product offering available. An hour or so of research can save you large sums of money in the long run and help you choose a company that will provide you with a more satisfactory experience.
The following factors should be compared when deciding upon a CFD company:
Buy-Sell Spreads. The spread that a CFD company will charge is one of the key ways they make money and is the difference between the buy and sell price. Spreads can vary depending upon the company in question and in some cases these variations can be pretty wide. Also bear in mind that different markets tend to have different spreads and again these will vary from provider to provider. If you plan on trading regularly then it is of great importance that you compare the market before signing up.
Leverage. Leverage allows you to open contracts with a company that are worth far in excess of your account balance. Another word that is used to explain this is margin and different companies have different margin requirements for different markets. One company might ask you to put 30% of the value of the contract up front while another might only demand 5%. If leverage is something of importance to you then make sure you visit each of the main company’s websites and research what they offer on you preferred markets. We also have a CFDs companies comparison chart on this site that you might want to take a look at.
Leverage is a great way to make vast sums of money in the blink of an eye but you must also take precautions as you can also lose your funds rapidly. Make sure you set up a stop loss with any contracts you open otherwise you might find yourself losing your home, car and other important possessions.
Training packages. If you are new to the world of trading then it is very likely that you are going to want to learn a thing or two about how it all works. Most companies offer a form of training although some are much better than others. Some companies such as Spreadco don’t offer any training for their clients at all, while ETX offer a free training course provided by a third party company worth over £500. We would recommend you sign up with ETX just to take advantage of this training even if you decide not to trade with them.
Wow, that’s a really clever way of thinking about it!