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The 1-Point Spread Explained -- Finspreads

Dec 20 2012 12:00AM

Marketwire

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LONDON -- (Marketwire) -- 12/20/12 -- Finspreads

You may have seen the term '1-point spreads' being touted by some spread betting providers on print ads and online display banners.

The point

But do novice traders know enough to understand the benefits of 1-point spreads? Finspreads is a back-to-basics spread betting provider, aimed primarily at those with little trading experience with the hope of unravelling this and many more jargon terms to attract a wider audience.

The spread

The '1-point' aspect of this message refers to the difference between the price at which you can buy a particular market, and the price at which you can sell it. The closer together the prices, the quicker you can potentially make a profit on your trade, as the market does not have to move as far in either direction to bring you a profit. Of course, if the market moves against you, you stand make a loss which could exceed your initial deposit if risk management strategies are not employed.

The difference between the two prices is known as the 'spread'. Hence, 1-point spreads. The tighter the spread, the better -- that's why the 1-point spreads offered by Finspreads is another attractive reason to get into trading.

The provider

Finspreads want as many potential traders to understand that spread betting does not have to be confusing and difficult. For many people, the only spread they're used to is the butter on their toast in the morning. But with the newly revamped site from Finspreads, filled with colourful videos and bite size guides to help you to get started, there's never been a better place to learn the game.

Spread betting carries a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.



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Source: Marketwire


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