Risks in Financial Spread Betting
Financial
spread betting, derivatives with high leverage, has become a very
popular trading strategy, as it offers a tax-free return of high
leverage. Spread betting has grown exponentially over the past decade as a
result of improvements in the electronic trading platform and mobile,
especially in England.
In
recent years, spread betting is only popular among sophisticated
investors and hedge fund traders, but now, spread betting started to
become increasingly popular among individual traders. Although banned in the United States, it is allowed and regulated in
the UK by the Financial Conduct Authority or the Financial Conduct
Authority (FCA).
Understanding Risks Financial Spread Betting.
It is generally considered that the spread betting produces a higher after-tax returns to investors. However,
this idea is not entirely accurate, and there is a trade-off between
the cost of the spread betting and commission and taxes in the
conventional trade. Whilst
spread betting allows traders to save commissions and taxes paid on the
value of trading, traders typically have to pay spreads that may be
higher than the commissions and taxes paid in the conventional spot
market trading. For example, if Microsoft (MSFT) is trading at 45 pounds in the stock
market, bettors tend to buy the scrip at a higher price (£ 45.50) and
sell at a lower price (£ 44.50).
The main risks involved in Financial Spread Betting:
Trading
with high leverage: Unlike the spot market, where users invest a total
price of a security (except using derivatives or bought on margin),
spread betting requires little capital to get started. Usually about 1% -10% of the value of the trade to get into the trade. Spread
betting with high leverage led to traders suffered losses quickly and
result in a margin call to perform the initial trade position in the
case of an adverse price movement. For
example, A does spread betting only need to pay £ 2,250 (5% margin
money) to buy the 1000 Microsoft (MSFT) shares at 45 pounds. Therefore, the value of total investment is £ 45,000. However, the decline in stock prices by 5% (£ 2.25) will reduce the
value of the total investment to £ 42,750 and will cause the loss of the
initial investment of £ 2,250.
The
risk of counterparty failure: Since no institution or clearing house to
guarantee the transaction spread betting, bettors depending on the
credit worthiness of a company that offers spread betting to clear the
transaction and receive payment. As a result, unlike the spot market, there is minimal regulation and lower governance to ensure transparency. This further shows the bettors to risk associated with trade licenses, payment, cash margin requirements, etc.
Price
Distortion: spread betting are used to speculate on price movements of
securities, where traders do not have the underlying asset. Sometimes, betting developing the underlying asset price and trading volume affect actual price discovery of securities. Similarly, the tax profit motive must have developed a trading volume that may affect the actual economics of security.
ConclusionFinancial
spread bettors exposes to the risks associated with leverage, the risk
of failure betting counterparty, regulatory developments, the high cost
of trading and price distortions. However,
most of the risk is justified by the return of leveraged tax free in
spread betting compared to conventional stock trading. (Pr & Dk)
Rabu, 24 Juni 2015
Differences Binary Option and Trading Day
Differences Binary Option and Trading Day
Binary option trading daily and they are the means to become a profit or loss on financial markets, but they are two different things. Binary option is a type of option where the gain / loss is entirely dependent on the outcome of yes / no proposition markets: Trader binary option will generate profits or losses still remain. Daily trading, on the other hand, is a trading style where the position is opened and closed during the same trading session. Profit or loss on a daily trader depends on a number of factors, including the entry price, exit price and number of shares, contracts or the number of traders who buy and sell.
Binary option is a financial derivative that gives the holder the right, but not the obligation, to buy or sell a fixed amount of a security or other financial asset at an agreed price (strike price) on or before a specified date. Binary option, do not give the holder the option to buy or sell assets.
Binary option is available on a variety of underlying assets, including stocks, commodities, currencies, indexes, and even on the news, like the Fed Funds Rate which will come, jobless claims and nonfarm payrolls announcement. Binary option raises yes / no questions: for example, will the price of gold is above $ 1,326 at 1:30? If you think yes, then you buy a binary option; if you think not then you sell. The price at which you buy or sell a Binary option is not the actual gold price (in this example), but the value between zero and 100. The trading range fluctuated throughout the day, but always settles at 100 (if the answer is yes), or zero (if the answer is no ). Profit / loss is calculated using the difference between the trader's settlement price (zero or 100) and your opening price (the price at which you buy or sell).
Trader binary option "bet" on whether asset prices will be above or below a certain amount at a certain time. Daily Trader is also trying to predict the direction of the price, but the advantages and disadvantages depending on factors such as the entry price, exit price, the size of the trade, and money management techniques. Such as the binary option traders, day traders can enter into trades to determine the maximum gain or loss by using profit targets and stop loss. For example, a day trader to enter orders and set a profit target of $ 200 and a stop loss of $ 50. Daily Trader, however, can "let their profits" to take full advantage of the large price movements. Of course, day traders can also let their losses get out of control by not using stoploss or remain hopeful that the direction will change. Day traders buy and sell a wide range of instruments including stocks, currencies, futures, commodities, indices and ETFs. (Pr)
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categories Forex | admin | February 17, 2015 | comments Comments (0)Risks in Financial Spread Betting
Financial spread betting, derivatives with high leverage, has become a very popular trading strategy, as it offers a tax-free return of high leverage. Spread betting has grown exponentially over the past decade as a result of improvements in the electronic trading platform and mobile, especially in England.
In recent years, spread betting is only popular among sophisticated investors and hedge fund traders, but now, spread betting started to become increasingly popular among individual traders. Although banned in the United States, it is allowed and regulated in the UK by the Financial Conduct Authority or the Financial Conduct Authority (FCA).
Understanding Risks Financial Spread Betting.
It is generally considered that the spread betting produces a higher after-tax returns to investors. However, this idea is not entirely accurate, and there is a trade-off between the cost of the spread betting and commission and taxes in the conventional trade. Whilst spread betting allows traders to save commissions and taxes paid on the value of trading, traders typically have to pay spreads that may be higher than the commissions and taxes paid in the conventional spot market trading. For example, if Microsoft (MSFT) is trading at 45 pounds in the stock market, bettors tend to buy the scrip at a higher price (£ 45.50) and sell at a lower price (£ 44.50).
The main risks involved in Financial Spread Betting:
Trading with high leverage: Unlike the spot market, where users invest a total price of a security (except using derivatives or bought on margin), spread betting requires little capital to get started. Usually about 1% -10% of the value of the trade to get into the trade. Spread betting with high leverage led to traders suffered losses quickly and result in a margin call to perform the initial trade position in the case of an adverse price movement. For example, A does spread betting only need to pay £ 2,250 (5% margin money) to buy the 1000 Microsoft (MSFT) shares at 45 pounds. Therefore, the value of total investment is £ 45,000. However, the decline in stock prices by 5% (£ 2.25) will reduce the value of the total investment to £ 42,750 and will cause the loss of the initial investment of £ 2,250.
The risk of counterparty failure: Since no institution or clearing house to guarantee the transaction spread betting, bettors depending on the credit worthiness of a company that offers spread betting to clear the transaction and receive payment. As a result, unlike the spot market, there is minimal regulation and lower governance to ensure transparency. This further shows the bettors to risk associated with trade licenses, payment, cash margin requirements, etc.
Price Distortion: spread betting are used to speculate on price movements of securities, where traders do not have the underlying asset. Sometimes, betting developing the underlying asset price and trading volume affect actual price discovery of securities. Similarly, the tax profit motive must have developed a trading volume that may affect the actual economics of security.
ConclusionFinancial spread bettors exposes to the risks associated with leverage, the risk of failure betting counterparty, regulatory developments, the high cost of trading and price distortions. However, most of the risk is justified by the return of leveraged tax free in spread betting compared to conventional stock trading. (Pr & Dk)
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Binary option trading daily and they are the means to become a profit or loss on financial markets, but they are two different things. Binary option is a type of option where the gain / loss is entirely dependent on the outcome of yes / no proposition markets: Trader binary option will generate profits or losses still remain. Daily trading, on the other hand, is a trading style where the position is opened and closed during the same trading session. Profit or loss on a daily trader depends on a number of factors, including the entry price, exit price and number of shares, contracts or the number of traders who buy and sell.
Binary option is a financial derivative that gives the holder the right, but not the obligation, to buy or sell a fixed amount of a security or other financial asset at an agreed price (strike price) on or before a specified date. Binary option, do not give the holder the option to buy or sell assets.
Binary option is available on a variety of underlying assets, including stocks, commodities, currencies, indexes, and even on the news, like the Fed Funds Rate which will come, jobless claims and nonfarm payrolls announcement. Binary option raises yes / no questions: for example, will the price of gold is above $ 1,326 at 1:30? If you think yes, then you buy a binary option; if you think not then you sell. The price at which you buy or sell a Binary option is not the actual gold price (in this example), but the value between zero and 100. The trading range fluctuated throughout the day, but always settles at 100 (if the answer is yes), or zero (if the answer is no ). Profit / loss is calculated using the difference between the trader's settlement price (zero or 100) and your opening price (the price at which you buy or sell).
Trader binary option "bet" on whether asset prices will be above or below a certain amount at a certain time. Daily Trader is also trying to predict the direction of the price, but the advantages and disadvantages depending on factors such as the entry price, exit price, the size of the trade, and money management techniques. Such as the binary option traders, day traders can enter into trades to determine the maximum gain or loss by using profit targets and stop loss. For example, a day trader to enter orders and set a profit target of $ 200 and a stop loss of $ 50. Daily Trader, however, can "let their profits" to take full advantage of the large price movements. Of course, day traders can also let their losses get out of control by not using stoploss or remain hopeful that the direction will change. Day traders buy and sell a wide range of instruments including stocks, currencies, futures, commodities, indices and ETFs. (Pr)
Sharing this article to your friends: (click below)
categories Forex | admin | February 17, 2015 | comments Comments (0)Risks in Financial Spread Betting
Financial spread betting, derivatives with high leverage, has become a very popular trading strategy, as it offers a tax-free return of high leverage. Spread betting has grown exponentially over the past decade as a result of improvements in the electronic trading platform and mobile, especially in England.
In recent years, spread betting is only popular among sophisticated investors and hedge fund traders, but now, spread betting started to become increasingly popular among individual traders. Although banned in the United States, it is allowed and regulated in the UK by the Financial Conduct Authority or the Financial Conduct Authority (FCA).
Understanding Risks Financial Spread Betting.
It is generally considered that the spread betting produces a higher after-tax returns to investors. However, this idea is not entirely accurate, and there is a trade-off between the cost of the spread betting and commission and taxes in the conventional trade. Whilst spread betting allows traders to save commissions and taxes paid on the value of trading, traders typically have to pay spreads that may be higher than the commissions and taxes paid in the conventional spot market trading. For example, if Microsoft (MSFT) is trading at 45 pounds in the stock market, bettors tend to buy the scrip at a higher price (£ 45.50) and sell at a lower price (£ 44.50).
The main risks involved in Financial Spread Betting:
Trading with high leverage: Unlike the spot market, where users invest a total price of a security (except using derivatives or bought on margin), spread betting requires little capital to get started. Usually about 1% -10% of the value of the trade to get into the trade. Spread betting with high leverage led to traders suffered losses quickly and result in a margin call to perform the initial trade position in the case of an adverse price movement. For example, A does spread betting only need to pay £ 2,250 (5% margin money) to buy the 1000 Microsoft (MSFT) shares at 45 pounds. Therefore, the value of total investment is £ 45,000. However, the decline in stock prices by 5% (£ 2.25) will reduce the value of the total investment to £ 42,750 and will cause the loss of the initial investment of £ 2,250.
The risk of counterparty failure: Since no institution or clearing house to guarantee the transaction spread betting, bettors depending on the credit worthiness of a company that offers spread betting to clear the transaction and receive payment. As a result, unlike the spot market, there is minimal regulation and lower governance to ensure transparency. This further shows the bettors to risk associated with trade licenses, payment, cash margin requirements, etc.
Price Distortion: spread betting are used to speculate on price movements of securities, where traders do not have the underlying asset. Sometimes, betting developing the underlying asset price and trading volume affect actual price discovery of securities. Similarly, the tax profit motive must have developed a trading volume that may affect the actual economics of security.
ConclusionFinancial spread bettors exposes to the risks associated with leverage, the risk of failure betting counterparty, regulatory developments, the high cost of trading and price distortions. However, most of the risk is justified by the return of leveraged tax free in spread betting compared to conventional stock trading. (Pr & Dk)
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ABOUT FOREX
understanding Forex TradingForex alias alias FX foreign exchange, the Indonesian called foreign currency or foreign currency. While trading Forex is a currency trading activities of one country and another, summarily forex trading. If the analogy, this Forex trading is almost similar to the money changer or the stock. Such as trading activities in general, profits in Forex trading
derived from the difference between the purchase price and the selling
price.
A case like this:A few months ago Sule buy US Dollars as much as $ 100 with the purchase or conversion of rupiah exchange rate of Rp. 9,000. And this week, it turns out the rupiah weakened against the US dollar so that the exchange rate to Rp. 10,000 per one US dollar. So, if Sule sell the dollar this week, he will make a profit worth (10000-9000) x $ 100 = Rp. 100,000.
Very similar to the money changer huh? Yes. But still no difference. In the next material will be discussed in more depth.
The next lesson: VS Forex Money Change
A case like this:A few months ago Sule buy US Dollars as much as $ 100 with the purchase or conversion of rupiah exchange rate of Rp. 9,000. And this week, it turns out the rupiah weakened against the US dollar so that the exchange rate to Rp. 10,000 per one US dollar. So, if Sule sell the dollar this week, he will make a profit worth (10000-9000) x $ 100 = Rp. 100,000.
Very similar to the money changer huh? Yes. But still no difference. In the next material will be discussed in more depth.
The next lesson: VS Forex Money Change
FOREX TRADING ON THE VARIOUS ARTICLES
Bullish Bearish and Sideways MarketWhat's Bullish Bearish and Sideways Market?, 10.0 out of 10 based on 2 ratingsRating: 10.0 / 10 (2 votes cast)
Bullish derived from Bull that is bull. When the markets are going to rise, meaning bull (Bull) are playing a role. When the bull was playing and in control, when it is referred to as the Bullish market.Bull called buyer, opposite Bear (bear) called the seller, while the number of buyers more than sellers. can also be concluded at that time called Bullish market.
In the forex market the term bullish uptrend sometimes called.Where the basic currency increases the value, while the value penuluran currency experienced partner.For example EUR / USD, if the EUR / USD is in a bullish market, means that EUR is experiencing a rise in value while the USD is losing / impairedEasy explanation why the EUR / USD bullish is: Because the European market is showing work performance that is better than the US market.
In the forex market is often categorized into three main types:1. Bullish: Up2. Bearish: Down3. Sideways: FlatIs Bullish Bearish opposed.In Indonesia the term Bullish / uptrend referred to Trend Up, while Bearish / Downtrend called Down Trend, from Bearish Trend Bullih and can all be able to generate profits for us, as long as we are not greedy.Greetings Profit.Tutorial:
bearish market understanding, sense the bull market, the materials bullish and bearish, bullish is, understanding berish market, market bullish, bearish notion, the notion bearish trend, the notion berish marker, understanding bullish and bearish marketPosts related to What's Bullish Bearish and Sideways Market?
Parabolic SAR Parabolic indicator SARIndikatorLinear Regression IndicatorsAsk definition instaforexDefinisi Bid and Ask Spread Bid and Spread
Posted 15th April 2014 by B. BS
Bullish derived from Bull that is bull. When the markets are going to rise, meaning bull (Bull) are playing a role. When the bull was playing and in control, when it is referred to as the Bullish market.Bull called buyer, opposite Bear (bear) called the seller, while the number of buyers more than sellers. can also be concluded at that time called Bullish market.
In the forex market the term bullish uptrend sometimes called.Where the basic currency increases the value, while the value penuluran currency experienced partner.For example EUR / USD, if the EUR / USD is in a bullish market, means that EUR is experiencing a rise in value while the USD is losing / impairedEasy explanation why the EUR / USD bullish is: Because the European market is showing work performance that is better than the US market.
In the forex market is often categorized into three main types:1. Bullish: Up2. Bearish: Down3. Sideways: FlatIs Bullish Bearish opposed.In Indonesia the term Bullish / uptrend referred to Trend Up, while Bearish / Downtrend called Down Trend, from Bearish Trend Bullih and can all be able to generate profits for us, as long as we are not greedy.Greetings Profit.Tutorial:
bearish market understanding, sense the bull market, the materials bullish and bearish, bullish is, understanding berish market, market bullish, bearish notion, the notion bearish trend, the notion berish marker, understanding bullish and bearish marketPosts related to What's Bullish Bearish and Sideways Market?
Parabolic SAR Parabolic indicator SARIndikatorLinear Regression IndicatorsAsk definition instaforexDefinisi Bid and Ask Spread Bid and Spread
Posted 15th April 2014 by B. BS
Forex Articles
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Main Success Secrets Forex
World gold prices Melorot 7.5 US DollarWelcome to Forex TradersPrint Email- ForexSignal88.Com -It is common knowledge if Forex used farm incomes and even more fields a dream for many traders in Indonesia. The dream of free life, time is flexible, can quickly grab profits and wealth the easy way is a common sight. But in fact, for most traders even loss ratio is greater than its benefit or in other words a dream just a dream. For Forex traders who have sailed the seas Forex and consuming acid salts, knows exactly the risk faced in a Forex trading.
Forex trading requires dedication and discipline in order to achieve maximum results. And we in ForexSignal88.Com know exactly that. By using technical analysis or fundamental comprehensively, we provide special services for Forex Signals our registered members. Come join our community today, click here to join our member.
FX News Video
Latest FX NewsMarket Update - 04.01.2014Written on 01/04/2014, 02:30 by adminmarket-update-01-04-2014ForexSignal88.Com, Jakarta - Opening of the new moon April 2014 also includes the start of a new quarter in which some important news to begin ...Read Selengkapnya20680Market Update - 09.01.2014Written on 09/01/2014, 06:55 by adminmarket-update-09-01-2014 Market Update - 09/01/2014 ForexSignal88.Com, Jakarta - After last night ...Read Selengkapnya22080Market Update - 06.04.2013Written on 04/06/2013, 09:16 by adminmarket-update-04-06-2013 ForexSignal88.Com, Jakarta - observed EURUSD is still in a bullish intraday trend corridor. After the Asian session EURUSD was ...Read Selengkapnya30000Market Update - 05.02.2013Written on 05/02/2013, 10:52 by adminmarket-update-02-05-2013 ForexSignal88.Com, Jakarta - EURUSD. After yesterday's Federal Reserve decided not to change its interest rate, today is ...Read Selengkapnya22660Market Update - 01.05.2013Written on 01/05/2013, 11:15 by adminmarket-update-01-05-2013 ForexSignal88.Com - Jakarta. The market is moving with a positive trend against US dollar. Observed US dollar index continued ...Read Selengkapnya22830Custom LinkForex Calendar
Forex trading requires dedication and discipline in order to achieve maximum results. And we in ForexSignal88.Com know exactly that. By using technical analysis or fundamental comprehensively, we provide special services for Forex Signals our registered members. Come join our community today, click here to join our member.
FX News Video
Latest FX NewsMarket Update - 04.01.2014Written on 01/04/2014, 02:30 by adminmarket-update-01-04-2014ForexSignal88.Com, Jakarta - Opening of the new moon April 2014 also includes the start of a new quarter in which some important news to begin ...Read Selengkapnya20680Market Update - 09.01.2014Written on 09/01/2014, 06:55 by adminmarket-update-09-01-2014 Market Update - 09/01/2014 ForexSignal88.Com, Jakarta - After last night ...Read Selengkapnya22080Market Update - 06.04.2013Written on 04/06/2013, 09:16 by adminmarket-update-04-06-2013 ForexSignal88.Com, Jakarta - observed EURUSD is still in a bullish intraday trend corridor. After the Asian session EURUSD was ...Read Selengkapnya30000Market Update - 05.02.2013Written on 05/02/2013, 10:52 by adminmarket-update-02-05-2013 ForexSignal88.Com, Jakarta - EURUSD. After yesterday's Federal Reserve decided not to change its interest rate, today is ...Read Selengkapnya22660Market Update - 01.05.2013Written on 01/05/2013, 11:15 by adminmarket-update-01-05-2013 ForexSignal88.Com - Jakarta. The market is moving with a positive trend against US dollar. Observed US dollar index continued ...Read Selengkapnya22830Custom LinkForex Calendar
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