Learn To Trade Forex Uk – Spread bets and CFDs are complex instruments and there is a risk of losing money quickly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to risk losing your money. Spread bets and CFDs are complex instruments and there is a risk of losing money quickly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to risk losing your money.
Learn how to trade online in the UK and access key markets – such as shares, indices, forex, commodities and more – using our award-winning platform.
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If you have any questions about trading or investing call 0800 409 6789 or email helpdesk.uk@ We are available 24/7 between Saturday 8am and Friday 10pm.
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Online trading is a way for traders from different backgrounds and with different levels of experience to access a wide range of the world’s most popular financial markets. When trading online, you use derivative products to speculate on the price movements of underlying assets – without owning the asset itself.
This is because derivatives such as spread bets and CFDs track the price of the asset on which they are based. Traders who use derivatives never deliver the underlying, whether it’s a security like gold or oil, foreign currency or company shares.
In comparison, if you invest, you buy, own and sell assets. For example, you can use our share dealing platform to buy and sell shares of more than 14,900 leading companies and ETFs.
Online trading is not like investing. When investing, you actually buy and own the asset. In the case of shares, for example, it gives you the right to vote on the RHTS and pay dividends if the company issues them. You can use our share dealing platform to invest in a wide selection of top stocks and funds.
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But, investing also means that you can only profit from price movements if you sell the asset for more than you paid for it. Because your investment property must appreciate in value, you are restricted from ‘holding’.
When ‘going long’, you believe the value of the asset will increase over a certain period of time, so you buy it with the intention of selling it later for a profit – ‘buy low, sell hh’.
If you are trading online with spread bets and CFDs, however, you can think about both rising and falling asset prices (long or short). ‘Shorting’ is the opposite of going long, which allows you to profit if you correctly predict the asset’s price decline.
When ‘short’, you open a trade by selling the derivative instrument at the current bid price. You then close the trade later by buying the derivative back.
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If your guess is correct and the market goes down – meaning you buy the derivative back at a lower price – you make a profit. Conversely, if the market price rises, you reduce the loss. In other words, the difference between the opening selling price and the closing buying price is your profit or loss (excluding any expenses).
However, please note that short selling is a hh risky way of trading because stock prices can continue to rise – theoretically without limit. This means that while taking a short position, you have to bear unlimited losses. You can attach stops to your position to protect yourself by placing your maximum potential loss.
When investing – like when you buy an asset – you have to pay the full price of the asset as an upfront cost. Conversely, when using derivatives, you can trade using leverage. Leverage allows you to open a trade by depositing a portion of the total exposure of your position – called margin.
Say you want to open a position in Coinbase shares. If you choose to invest, you must pay the full value of the shares in advance. But, if trading using leveraged derivatives instead, you need to put a deposit of only 20% of your total exposure.
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With a required margin of 20%, your leverage ratio is 1:5. This means that every 1% movement in the market price results in a 5% change in your deposit. While leverage can help reduce your initial costs, it will also act to increase your profits and losses – so it’s important to understand this trading feature well before opening a position and taking steps to manage your risk.
With us, you’ll use spread bets and CFDs to access over 17,000 UK and international markets, including shares, commodities, forex, indices, ETFs and bonds – both of which are leveraged derivatives.
Spread bets work by tracking the value of the underlying asset so you can gain a position on the asset’s market price changes without actually owning it. When you spread bet, you put a certain amount of capital on each point of change. Your profit and loss are calculated by multiplying the size of your bet by the movement of the underlying market.
For example, after some research, you believe that GlaxoSmithKline’s stock price is poised to rise. As a result, you open a spread bet for £10 per point.
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If you open your position by buying the stock at 1250 and close it by selling at 1265, you will make £150 (15 points x £10 per point). If, however, the market falls and you sell at 1240, you reduce the loss by £100. The potential profit and loss does not include any additional costs.
Remember that all leveraged trading puts your capital at risk, and you should always consider whether you can afford to lose more than your deposit.
A ‘contract for difference’, or CFD, is an agreement to exchange the difference in the price of an underlying asset, measured from the time the contract is opened until it is closed.
For example, you are engaged in analysis and believe that the price of Tesla will rise from its current level of 700. So you buy five Tesla share CFDs. Your guess is correct, and you close your position when the market reaches the sell price of 725. The difference is £25.
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Your total profit, excluding other costs, is calculated as follows: (725 – 700) x 5 CFD = £125. If, however, the market goes against you and you close at the 685 level, your loss will be £75.
You can trade both rising and falling markets using CFDs. To open your position, you buy a contract if you believe the asset’s price is set to rise, and sell the contract if you believe its price is set to fall.
Your profit or loss is determined by subtracting the price of the underlying when buying the CFD from the price of the underlying when selling the CFD – whether you are buying or selling to open your trade.
But, please note that all leveraged derivatives are complex instruments and you may lose more than your initial deposit. All trading involves significant risk.
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If you prefer traditional investing to online trading, you can consider shares, exchange traded funds (ETFs) and managed portfolios:
Investment in individual company shares. You can do this to benefit from long-term price appreciation or to receive dividend and compounding returns.
Trading in the virtual market will allow you to explore, experiment and learn with confidence. Our demo accounts have a pre-set balance of £10,000 in virtual funds. By recreating the dynamics of ‘real’ trading, you get the chance to see how our financial products and markets work – all without risking any capital.
You can easily switch between your practice spread bet and CFD accounts to see which instrument best suits your preferences. Even experienced traders can use demo accounts to test new strategies, tools or ideas, safe in the knowledge that your experiments won’t hurt the real world.
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Our online trading platform offers low spreads, exclusive 24/7 trading opportunities, out-of-hours trading on 70+ top US stocks and gives you access to 17,000 popular domestic and international markets.
Below, you can see which markets you can trade – and whether you can go long or short – using our spread bets and CFDs. You can also view similar information for our share deal offering.
Stocks such as Lloyds, Apple and Tesla are popular securities to trade. As a representation of a unit of ownership in a company, shares appreciate or depreciate in value – that is, price – along with supply and demand, often related to the company’s performance. If strong earnings increase market demand for the stock, the stock price will rise, and
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