Two Types of Spread Betting Account

There are normally two different types of account offered by the Spread Betting companies; credit accounts and deposit accounts

Spread Bet Deposit Accounts

These are the simplest to open and very easy to understand. Basically you deposit a cash sum with your Spread Bet broker and use this to trade with.

Deposit accounts are simple to open because the spread bet broker doesn't have to do a detailed credit check into the client. The broker will however do the usual due diligence into the client's suitability. Many spread betting clients argue that deposits accounts are the best type of accounts to open because one is forced to bet within one's means.

Spread Bet Credit Accounts

A credit account is more complex because normally no money is deposited, with credit being offered in its place. In order to open a credit account the broker will do extensive checks on your credit rating as well as making sure that you do have the necessary liquid funds to pay for any losses that you may accrue.

Of course the more liquid funds you have the more credit you can get. Some clients insist for a cap to be placed on any credit that is granted. For example, if your broker authorises a credit account of £20,000, you can ask him to limit this to only £10,000.

Spread Betting Companies Differ

Prospective clients must realise that the different spread betting companies have different rules and requirements when it comes to authorising accounts, so you much check beforehand.