Spread betting allows you to trade a whole range of financial markets around the world. Investors are not just restricted to shares in companies; there are thousands of global instruments available to choose from.
Many investors today prefer to trade indices rather than individual companies as they give a broader view of the economy. Investors can use a range of benchmarks composed of the largest companies in a given country, region, or sector in order to track the economic performance of that area. This allows investors to buy and sell individual markets as easily as single shares. Examples of indices Digital Look Markets quote include the UK 100, the US 30 and the German 30.
Foreign exchange markets have obvious appeal for the private investor: they represent a 24-hour, global and highly liquid market in the currencies of various countries. Companies that transact business across borders must buy and sell currency in this market, but investors can speculate on changes in the relative prices between dozens of currencies around the world. Major currency pairs include Euro v Dollar, Sterling v Dollar.
The shares of major companies which have been issued to raise capital, have long been popular market instruments for investors to trade. The share price reflects the value the market places on that company. Examples of shares include Vodafone, Apple and BP.
Commodities represent many of our vital resources in terms of food and industry. This includes livestock and grains, as well as metals, timber, pulp, and oil. Prices are influenced by a range of factors specific to each commodity class, from supply and demand conditions, weather and political risks, to pure speculation in some of the smaller markets. Examples of tradable commodities include oil, coffee and sugar.
Governments issue bonds as a means of borrowing money from global capital markets. The interest rates they pay on each debt security are determined by how enthusiastic investors are about buying that debt: the less the market wants to buy it, the higher the interest a government in question will have to pay. Unlike equities, government debt has a specific date at which it matures and investors receive their capital. Examples of bonds include UK Gilts, T-Bonds and Euro-bunds.
Trading a sector allows you to take a wider view of a market by allowing you to trade a basket of equities from a particular industry rather than picking an individual share. This works in a similar way to an index trade where the price reflects the total value of each sector. Sectors include the banking, mining and pharmaceutical industries.
Spread Betting, is a leveraged product and carries a high degree of risk to your capital and it is possible to lose more than your initial investment. Only speculate with money you can afford to lose. These products may not be suitable for all investors, therefore ensure you fully understand the risks involved, and seek independent advice if necessary.
Digital Look Markets is a trading name of CMC Spreadbet Plc who are authorised and regulated by the Financial Services Authority 170627. Spread betting services are provided by CMC Spreadbet Plc trading as Digital Look Markets, to whom you have been introduced by Digital Look Ltd. All dealing, administration and settlement in relation to these services is undertaken by CMC Spreadbet Plc. You and CMC Spreadbet Plc not Digital Look Ltd will be counterparties to each transaction.
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