City FX Investment | High Return Investments with variable low risk exposure
 
CityFX
Email: info@cityfxinvestment.com Call: +44 (0)20 8935 5601
INVESTMENT
  •  
  •  
     
    Home > Forex Spread Betting > Spread Betting Risks


      Spread Betting - The Risks
       
      Every investment or speculation has risks, whether you are opening your own coffee shop, buying a house or choosing where to put your money. Spread betting has far more the feel of gambling, often compared to picking horse or putting all of your money on red. However the main difference is that financial institutions have been making millions out of financial markets for years and with the right knowledge and expertise you should be able to place your bet with a little more informed knowledge than just the guess at the spin of a roulette wheel.

    One of the main reasons Spread betting can be very risky is the huge leverage that is offered by many Trading Platforms and whilst this is very useful in making your investment far more effective at geenrtaing profits it will also make your speculation generate a very quick negative balance.

    What we recommend to all traders whether large or small is to know the extremes of teh trade you are in, as we have heard many timee over the years from the banks 'What is the worst case scenario'. if everything goes agaisnt you how badly could your currency pairs rise or fall and if it does, do you have the time and resources unds to cover your position?

    In essence this should be no different to when you buy a house. If you take out a 1005 mortgage you can only just afford, the instant thought is well what if house prices drop? What if interest rates increase and your monthly outgoings increase? What if you do not have the funds to pay your monthly mortgage? Already it seems obvious to all that as you are trading to the max this leaves you with little room for negative movement. However if you had only taken a 50% mortgage and monthly paymenst were only half of your income, already you are in a sustantially safer and more controllable position.

    We would advise using this same analogy in yoru Spread Betting, do not bet the whole house on one position. You may well be right that the curency pair you are trading is about to dip. But if it suddenly spikes first you may have your trades closed out and lose your capital before you can benefit.

    Spread Betting Platform may seem very generous with their high leverage options but do not be fooled, they are not there to back your position or lend you any real money. As soon as your position moves close to losing your entire initial capital, they will close out all of your trades and hand you the change. Spread Betting Platforms are there to offer you a service not to back your specualtions. So the simplest advice we can give you is make sure you have teh funds and resources to back your speculations, in the worst case scenario.

       

       
        Read more on Forex Spread Betting
       


     
    News and Forecasts
      Climate change: CO2 emissions rising for first time in four years  
      Tue, 27th Nov 2018 11:49:00  
      Global efforts to tackle climate change are way off track says the UN, as it details the first rise in CO2 emissions in four years. The emissions gap report says that economic growth is responsible...read more  
         
      Trump on climate change report: 'I don't believe it'  
      Mon, 26th Nov 2018 10:13:00  
      US President Donald Trump has cast doubt on a report by his own government warning of devastating effects from climate change. Asked outside the White House about the findings that unchecked global...read more  
         
      Climate change: Report warns of growing impact on US life  
      Sat, 24th Nov 2018 16:00:00  
      Unchecked climate change will cost the US hundreds of billions of dollars and damage human health and quality of life, a US government report warns. "Future risks from climate change depend... on decisions...read more  
         
      Amazon rainforest deforestation 'worst in 10 years', says Brazil  
      Sat, 24th Nov 2018 9:33:02  
      Deforestation of the Amazon rainforest in Brazil has hit its highest rate in a decade, according to official data. About 7,900 sq km (3,050 sq miles) of the world's largest rainforest was destroyed...read more  
         
      China-backed coal projects prompt climate change fears  
      Wed, 21st Nov 2018 19:40:12  
      As levels of greenhouse gases reach a new record, concerns are growing about the role of China in global warming. For years, the increase in the number of Chinese coal-fired power stations has been...read more  
         
      Spain plans switch  
      Tue, 13th Nov 2018 15:13:41  
      Spain has launched an ambitious plan to switch its electricity system entirely to renewable sources by 2050 and completely decarbonise its economy soon after. By mid-century greenhouse gas emissions...read more