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FAQ Page 4 - Question 42

Q: My wife and I are retired, we like to watch the racing on TV everyday betting £5-£10. Can we also punt on the markets using small amounts of money?

A: Of course, and this is one of the nice aspects of spread betting, you don't have to risk a lot to play. But I would caution you on day-trading because of the costs involved. Make sure you understand this point.

What I'd suggest that you do is to pick 10 varied markets, say the FTSE 100, Nasdaq 100, Gold, crude oil, wheat, 1-2 technology stocks, 1-2 financial stocks and copper. Keep a very simple chart on them and try to understand how they trade from day to day and week to week. Then after about 1-2 months I think you'll have a lot better idea of what you're doing and how things work.

Then start trading looking for moves that last at least a week, for example you might buy gold at $400 expecting it to trade $20 higher within a month or so. Of course though you might get the trade wrong so make sure you always use some sort of stop loss.

To sum up, play unrelated markets, bet small amounts so even if you get a trade very wrong your loss is unlikely to be above £25, be patient and don't expect to trade every day. Finally realise that spread bets are not like a bet down at your bookies, the loss is never fixed. If you want a fixed odd - fixed payout bet then have a look at Binary Betting.