A guide to online trading

What are CFDs?
CFDs, or contracts for
difference, are a flexible
alternative to trading on the
price movement of
thousands of global markets,
including forex, indices,
shares and commodities.
When you trade CFDs, you
don’t own the underlying
product, but rather bet on
the price movement of that
product, which means you
can take advantage of prices
moving up or down in value.
When trading a CFD you are
trading in multiples of the
value of each CFD contract.
For example a UK100 CFD
has a contract size of £10.
This means, for every point
the price moves in your
favour, you gain multiples
of the number of units you
have bought or sold. For
every point the price moves
against you, you will make a
loss.
What are the
advantages of CFD
Trading?
CFDs are a leveraged
product, which means you
only need to deposit a small
percentage of the full
value of your position. This
is called ‘trading on margin’.
While trading on margin
allows you to magnify your
profits, remember, losses
will also be magnified as
they are based on the full
value of the position.
This means you could lose
more than the amount you
placed to make the trade.
This is why, when trading
CFDs with LCG, you have
access to risk management
tools, such as guaranteed
stops, which means you can
effectively manage your
risk exposure and cap your
losses, before you have even
placed the actual trade.
Besides the ability to
increase your buying
power, there is no stamp
duty to pay, as you don’t
actually own the underlying
asset and you can also take
either a short (sell) or long
(buy) position, giving you
greater trading flexibility.
Is CFD trading for you?
Trading CFDs is ideal for
active traders with a strong
understanding of the
markets. It’s a flexible,
efficient way to diversify
your portfolio into different
global markets and expand
your trading opportunities.
When you trade CFDs with
LCG, you’ll enjoy tight,
industry leading spreads and
an exceptionally competitive
price.
How to get started
Our multi asset class
trading platform, LCG
Trader, let’s you trade
thousands of CFDs directly
from charts on mobile,
tablet and desktop
delivering a superior trading
experience on all your
devices. To start trading
CFDs, open a LCG account
today, and experience the
power to Trade Connected.
TRADE CONNECTED
1

What is financial
spread betting?
Financial spread betting is
a tax free form of investing,
allowing traders to take a
position on whether
global markets including
forex, indices, shares and
commodities will go up or
down in value. When you
spread bet, you are not
buying the underlying product,
but rather betting on
the price movement of that
product, allowing you to
take either a short (sell) or
long (buy) position, giving
you greater trading flexibility.
The spread is the difference
between the sell and
buy price of the product you
are betting on. The more the
market moves in the direction
you predict, the more
profit you make. The more
the market moves in the
opposite direction, the more
you stand to lose.
What are the
advantages?
Financial spread betting lets
you trade at a time that suits
you with 24 hour access to
a wide range of global markets.
You can spread bet on
forex, indices, shares and
commodities and because
you don’t own the underlying
asset you won’t pay
stamp duty or tax on your
profits.
Spread betting also allows
you to take a position which
is short or long, so you’ll
have more options and you
can also effectively manage
your risk by using dedicated
stop loss tools.
Is spread betting for
me?
Spread betting is ideal
for active traders with a
strong understanding of
the markets. At LCG you’ll
enjoy tight, industry leading
spreads across a wide range
of global financial markets
so when you spread bet
with us you’ll always get an
exceptionally competitive
price. If you want to
diversify your portfolio and
take advantage of market
moving events, then
financial spread betting is
definitely for you.
How do I get started?
Our multi asset class trading
platform, LCG Trader, lets
you spread bet directly
from charts on mobile,
tablet and desktop,
allowing to you enjoy a
superior spread betting
experience on all your
devices.
Open an account with us
today, and start trading
with a demo account to
learn more. When you’re
ready you can start trading
using a live account.
LCG Trader
TRADE TRADE CONNECTED
2

Avoiding common
trading mistakes
Like any other skill, online
trading takes practice to
master. Many new traders
start out with little practical
market knowledge which
can lead to poor decision
making.
Before you get started it is
very valuable to get a basic
understanding of charts
for the market you’d like to
trade, you should also learn
more about new trading
methods and strategies.
Understanding the
markets
Remember, to become a successful
trader, preparation
is key.
You can study charts for all
of the 4,000 markets we offer
in the LCG Trader Demo
platform and can review
trends, volatility, range and
trading fluctuations to get a
better feel for the markets
you’re interested in.
The more time you spend
studying the markets you’re
interested in, the more natural
your decisions will be.
You’ll also feel more confident
taking a position if you
have an in-depth knowledge
of the market you’re trading.
If you’re just starting out,
immerse yourself in the latest
news, analysis
and research on our website
to get up to the minute
information on market
moving events.
You’ll also find on-demand
video content covering
everything from getting
started with pending orders
and identifying trading
trends to explanations on
the differences between
technical and fundamental
analysis. At LCG you’ll have
all of the tools and resources
you need to be as successful
as possible.
Be realistic about
returns
While you will be able to
build up to making large
profits, when you first start
out be realistic about how
much you trade and the potential
returns you’ll enjoy.
To help get you more familiar
with using our trading
platform and to help you
feel more comfortable placing
trades, start by opening
a Demo Account.
You’ll get £10,000 demo
credits to get you started
and can trade
on all our available asset
classes including forex,
indices, shares and commodities.
Formulate a trading
strategy
When you start trading, get
into the habit of devising a
clear trading strategy before
you start actually trading
and stick to it.
Start by knowing the volume
of trades you intend to place
as well as the kind of positions
you are comfortable
taking, are you comfortable
with a greater or lesser
amount of risk exposure?
Record all of your trades too
for a clearer understand of
what is working for you and
where you can improve your
decision making.
TRADE CONNECTED
3

Devising a trading plan
and managing risk
One of the most important
aspects for new traders is
understanding risk management
and developing a
sound trading plan.
Creating a trading plan can
help you determine how
much risk you feel comfortable
with while making
your investment objectives
clearer. A trading plan will
also allow you to accurately
record entry and exit price
and so track your trading
performance more precisely.
The more closely you track
your successful and unsuccessful
trades, the easier it
is to get a feel for what is
working for you and where
your decision making could
improve.
When devising your trading
plan keep these points in
mind:
What is your motivation
for trading?
How much capital do
you realistically have to
invest?
Have you considered
setting up a stop loss?
How much time do you
have available for
trading?
Finally, what are your
expected returns?
What is your
motivation for trading?
Being clear about your
reasons for trading will help
you assess the level of risk
you’re comfortable with. For
instance, if you’re trading to
learn more about the financial
markets in general you
will likely not want to expose
yourself to risky trades
which could see you lose a
larger proportion of your
capital.
If however you are trading
as a way of increasing
your potential income, then
you’re more likely to be risk
averse in search of greater
profit.
How much capital do
you have to invest?
Never invest more than you
can afford to spend when
you trade online. Start with
a realistic amount and bear
in mind that losses can exceed
deposits.
Setting up a stop loss
Setting up a stop loss can be
very beneficial, especially
for traders who have less
time to be “hands on” and
active throughout the day.
Stop losses are quick and
easy to set up and provide a
safety net for your trading
by closing open positions
once your losses reach a
predefined limit.
You can learn more
about stop losses and
modifying open positions
within our LCG Trader
platform by visiting the
platform tutorial page of
our website.
How much time do
you have for trading?
Knowing how much time
you have to dedicate to
your trading will help you
get a feel for the type of
positions you can make
the most profit from. Are
you able to place trades
which take advantage of
short term market volatility
or is your time more
suited to taking longer
term positions?
What are your
expected returns?
Work out what your expected
returns are for your
trading by being realistic
about how much you have
to invest.
Start with less risky trades
to build up your market
knowledge and confidence
before moving to bolder
trading positions which
offer potentially bigger
profits.
TRADE TRADE CONNECTED
4

Top tips when trading
FX, commodities,
indices and shares
Diving into the market
without an understanding of
trading can be overwhelming
and daunting at first.
Besides deciding exactly
what to invest in, there is
also the question of how
much to invest, what to invest
and when to invest.
Understanding a few key
rules for investing successfully
is crucial in improving
your trading performance.
Keep these three points
in mind when approaching
trading forex, indices, shares
and commodities:
Follow the markets
with LCG
Our education team
provide webinars, seminars
and online learning modules,
catering for a range of
trading experience as part
of our ongoing education
program for potential and
existing customers.
Whether you’re a beginner
or already trading CFDs, our
education program is
tailored to your level of
trading experience. Learn as
much as you can from our
comprehensive education
materials to continuously
improve your trading.
We’re here to help
Each morning your
dedicated account manager
will help to highlight the key
trading opportunities for
the day ahead and will assist
with any specific
requirements to help you
navigate the markets.
Your expert personal
account manager can place
trades at your direction over
the phone and share their
unparalleled market
knowledge to help you get
the most from your trading
with us.
Clarify the risk tolerance
Determine the average
trading horizon
Decide which
instruments are the most
appropriate for you
At LCG we have put together
a world class team
consisting of some of the
industry’s best market analysts.
Our team are leaders
in their field and will provide
you with high level analysis,
breaking news and in-depth
market reports. With LCG
you’ll get access to the tools
and data you need to take
your trading to the next
level and you’ll learn more
about managing risk tolerance
and understanding the
trading universe.
TRADE CONNECTED
5

Understand Gross
Domestic Product
Gross Domestic Product
(GDP) is the broadest overall
benchmark of economic
activity and quantifies the
production of goods and
services within any given
country.
Arguably one of the most
important economic statistics,
GDP is calculated by
adding all expenditures and
all final goods and services
produced during the year as
shown in the equation below:
GDP = C + I + G + (X - M).
Where:
C = Consumption (household
consumption – like
rent, food, fuel)
I = Investment (can include
household investment in
property, business spending
on equipment)
G = Government expenditure
and investment (total
of all government spending,
public sector salaries, defence
spending)
(X-M) = Net exports (exports
minus imports)
(Note: higher net exports
are more economically
productive)
U.S., regardless of the producer’s
nationality. GNP
does not include goods
and a service produced
by foreign producers, but
does include goods and
services produced by U.S.
firms operating in foreign
countries.
GDP and domestic
currency impact
Simply put, any increase in
GDP tends to indicate an
improving economy. This is
a generally positive for the
domestic currency.
Any decrease in GDP, relative
to the previous quarter
or indeed the same period in
the previous year is generally
negative for the domestic
currency.
Nothing is ever all that simple
so it’s important to know
that an extreme economic
expansion can ramp up inflation
expectations and even
create significant inflationary
concerns.
Most, if not all central
banks, have a mandate to
keep inflation in check.
Any signs that an economy
is overheating might
inspire an interest rate
cut and a tightening of
monetary policy.
Most of the components
that comprise the report
are known well in
advance, meaning that
changes in GDP tend to
be well anticipated.
If the figure differs from
market expectations,
it has the potential to
cause significant market
movement.
Remember: Do not confuse
Gross Domestic Product
with Gross National Product
(GNP). GDP includes
only goods and services
produced within the geographic
boundaries of the
TRADE TRADE CONNECTED
6

Leading indicators for
GDP
Purchasing Manager’s Index
(PMI)
The PMI is released by the
Institute for Supply Management,
formerly the National
Association of Purchasing
Managers. The report collects
“better”, “same” or
“worse” information from a
mere 400 purchasing managers
throughout the country
and compiles it into an
index.
Business Inventories
It can be quite difficult to
ascertain what high levels of
inventory reflect as it may
often by be open to interpretation.
An increase in inventory can
suggest that businesses are
building a glut of inventory
based on consumer demand
expectations. If higher consumption
materialises, then
this will be both profitable
for the business and ergo
good for the economy.
that consumer confidence is
muted so can thus be a negative
signal for a business
and the economy.
Retail Sales
These are released monthly
by the US Department of
Commerce – on a Thursday
generally 2 weeks after the
end of the reference month.
The data is utilised by many
government sectors to calculate
GDP, inflation as well
as analyse present economic
activity.
Manufacturing activity is
an important segment of
any economy. An increase
in manufacturing output
can suggest more demand
for consumer goods and
since workers are normally
required to produce these
goods an increase can help
to boost employment and
employee wages.
Always look at the inventory
levels (more detail below) as
sometimes the goods produced
do not make it all the
way to the consumer – often
sitting in storage until the
demand picks up. Rising retail
sales (more detail below)
in conjunction with rising
manufacturing output can
indicate heightened demand
for consumer goods.
Given its historical reliability
in helping to predict
growth in gross domestic
product (GDP), it’s important
to be aware of these
data points in concert.
On the flipside, holding
inventories costs money
in storage costs and high
inventory levels can sometimes
indicate that supply
exceeds demand. This can
often be a sign that retail
sales are inadequate and
Strong retail sales will in
general directly increase
GDP. Improving sales for a
company means profitability
and also that company can
potentially hire more employees
so all in all its good
news for a domestic economy
and ergo its currency.
Example
US Retail Sales for April 2015 missed expectations. The consensus
was for a rise of 0.2% on the previous month. The dollar was
sold off relative to the pound as a result. It lost 67 points in the
hour following the release but continued to depreciate over the
next 24 hours shedding a total of 180 points against the British
pound.
TRADE CONNECTED
7

Building Permits and
the Housing Market
Permits give insight into
future real estate supplies.
High volume would indicate
an active construction industry
which in turn brings
more jobs and an increase in
GDP.
Bear in mind that, like inventory
levels, if consumers
are not willing to buy, there
will be a surplus of housing
which will likely lead to declining
house prices.
Declines in housing have
a negative impact on the
economy for several reasons:
1. They decrease homeowner
wealth.
2. They reduce the number
of construction jobs needed
to build new homes,
which in turn increases
unemployment.
3. They reduce property
taxes, which limits government
resources.
4. Homeowners are less
able to refinance or sell
their homes, which may
force them into foreclosure.
When you look at housing
data, look at two things:
changes in housing values
and changes in sales. When
sales decline, it generally indicates
that values will also
drop. For example, the collapse
of the housing bubble
in 2007 had dire effects on
the economy and is widely
blamed for driving the United
States into a recession.
Why do the markets
care?
Given that the old adage
states that when the US
sneezes, Europe catches a
cold; US GDP is important
both domestically and globally
speaking.
The health of any economy
is intimately connected to
consumer sentiment but
the health of the
world’s biggest
economy is important
to global sentiment.
When all is said and done,
sentiment is what drives
markets.
TRADE CONNECTED
8

Understanding Nonfarm
payroll (NFP)
Nonfarm payroll is an economic
indicator used to
describe the number of
employees at manufacturing,
construction and goods
companies in the US.
This indicator does not include
the farm workers and
private households as the
name suggests.
The change in nonfarm jobs
is closely watched as traders
use the data as an indication
of the economic performance
to predict the Federal
Reserve’s monetary policy
outlook and to trade upon it.
Besides the nonfarm payrolls,
the unemployment and
participation rate as well as
the change in average earnings
are important to complete
the picture.
The change in non-farm
payrolls is released the first
Friday of each month and
generally triggers meaningful
price action in intraday
trading. Volatility means
opportunity.
How does a trader read the
change in non-farm payrolls
and take a bet?
It is all about the market
expectations. Numerous
market surveys define the
consensus – an average
expectation – for the data
release each month.
On June 5, 2015 the consensus
for the nonfarm
payroll was 226K. The release
of 280K surprised the
market on
the upside and triggered immediate US dollar purchases as a
knee-jerk reaction.
Figure 1 – EURUSD reacts to Nonfarm payroll release on
June 5, 2015
In the Figure 1, the EURUSD instantly sold-off from 1.1276
to 1.1075 as the US jobs data beat the market estimates.
Traders became more optimistic regarding the US economy
and speculated that the Federal Reserve may increase the
interest rate in September, rather than a quarter later as previously
thought.
This has been positive news for the US dollar and got instantaneously
priced in by the FX traders. The EURUSD extended
weakness to 1.1050, short-term support level, over couple of
minutes following the release and rebounded to 1.1100/10
as the first reaction got absorbed by the market.
Alternative case: What if the data had missed the market
expectation on June 5?
The size of the price action depends on how disappointing
or how surprising the data is. A quick glance to expectations
is enough to observe the importance of the 200K threshold.
Naturally, the psychological levels are important in economic
data releases.
A read below this level would have triggered a US dollar
sell-off and push the euro to higher levels. In this alternative
case scenario, the technical resistance levels would be activated.
Placing ourselves on June 5, the 1.1314 top which was
hit the eve of the nonfarm payroll release would be the key
level monitored by traders, where a potential breakout would
place the 1.1467, the five month high, in focus.
TRADE CONNECTED
9

It is often too late to
trade once the data is
out
Given that the reaction
move is very rapid, it is
almost impossible to enter
a trade once the data is out.
This means that traders
place their buy or sell orders
before the economic
release, according to their
own prediction on the upcoming
data.
In a similar way, the rapid
price action requires a solid
risk management. Once the
reaction move is triggered,
it is almost impossible to
get out of an open position.
Therefore, the stop loss
orders are good protection
if the market moves on the
opposite direction.
Some traders may believe
the US economic performance
has not been good
enough to create 226K (consensus)
jobs, while others
may think that more jobs
have been added during the
observed month. As decent
buy and sell orders stand
before the release, the
movement, in either direction,
generally happens very
quickly.
TRADE CONNECTED
10

Understanding more
about short selling
Short selling is the sale of
security that is not owned
by the seller. Short-selling
borrows the stock to sell
with a promise to deliver the
security back to the original
owner at some time in the
future.
This means that selling short
a stock implies a buy back in
the future for restitution.
The brokerage companies
are the most commonly used
as lenders that play the role
of intermediary between the
investors and the short-sellers
in exchange of a fee.
Somewhat a
contradictory view of an
investment, short-selling is
a way to generate return on
poorly performing security.
In practice…
Back in days, short selling
was mostly at financial institutions,
hedge funds and
a handful of individual traders’
disposal.
Today, a fast growing industry
of brokers offers the
short-selling possibility to a
vast pallet of investors and
at very competitive prices.
A margin account allows an
investor to borrow cash in
exchange of the initial investment
as collateral.
The online brokerage firms
give the opportunity to
short sell a stock via a single
click. ‘Short sell’ or ‘sell to
cover’ are the most commonly
used wording on a
trading platform.
As the investor places a
short sell order, the brokerage
firm borrows the shares
from its own inventory, on
the margin account of one of
its clients or from another
broker and sells the borrowed
shares in the market.
The proceeds from the sale
of shares are then credited
on investor’s account. The
profit and loss is calculated
on the differential of the
sale price and the market
price.
LCG Trader
mobile phone
app
Given that the stock price
cannot slip below zero, the
gains are limited. The risk of
loss, however, is unlimited
while selling short a security,
the price of a security can
rise infinitely. Therefore,
only experienced traders are
recommended to sell short.
Short selling is, and cannot
be, a long-term strategy given
that companies are here
to succeed and not to fail.
Stocks are naturally expected
to gain in value over time.
Selling a stock is mostly
swimming against the flow
and is therefore a risky play.
TRADE CONNECTED
11

Understanding the
Consumer Price Index
The Consumer Price Index
(CPI) is the most widely
used measure for tracking
the price of a weighted
basket of goods and services
purchased by households. It
is the basic measure of how
expensive a regular consumer
basket becomes from one
month to another.
Read our short article for
more information on what
comprises CPI, how often
data is published, what influences
CPI and top tips for
trading.
The consumer basket
includes standard
goods and services
that a standard household
would consume
on monthly or yearly
basis and the weights
are attributed on the
basis of general consumption
patterns in
a particular region,
hence they may differ
geographically. In the
UK, potatoes will certainly
weight heavier
in a standard consumer’s
basket while in
France, we would expect
the baguette prices
to be more relevant
to see how expensive
life has become for a
standard household.
Hence food and beverages
would weigh
heavier in a typical
consumer basket
in a family living in
an emerging country
while a standard
family in a developed
country is expected to
spend a larger proportion
of its budget in
technology and recreation.
The consumer price
index is released on
monthly basis. Given
the volatile nature of
food and energy prices,
the central bankers
and traders usually
base decisions on the
core consumer price
index, which excludes
food and energy components
to give a
clearer picture of the
underlying price dynamics.
How to trade the CPI?
In practice, it is not the
inflation number itself that
matters; it is the gap between
the inflation expectation
and the realised inflation
that is going to give the
market a direction.
In order to understand
whether a strong, or weak,
inflation number is good, or
bad, traders should be well
aware of the macroeconomic
context.
Nowadays, developed markets
are struggling to step
out of a deflationary cycle.
So a strong read is positive
for their currency.
As an example, we can
say that a better-than-expected
Eurozone inflation
could trigger a positive
reaction and send the euro
higher against the dollar.
In contrary, the emerging
markets fight against
the overheating consumer
prices and do not like inflation.
Therefore in Brazil,
a stronger-than-expected
inflation number will trigger
a sell-off in real.
Of course, the above stated
examples are not pre-set
rules. The market could react
in the opposite direction
if there are second-degree
factors priced in by the majority
of market participants.
If the Brazilian Central Bank
is ready to increase its monetary
policy rate to control
the inflation, then a stronger
inflation number would revive
the speculation of a rate hike
and bring traders to position
themselves on the buy side of
the game.
This is why the interpretation
of a macroeconomic data could
be very complex. It is critical to
be fully aware of the macroeconomic
setting before taking
a directional position.
TRADE CONNECTED
12

What are CFDs?
CFDs, or contracts for difference,
are a flexible alternative
to trading on the
price movement of thousands
of global markets,
including forex, indices,
shares and commodities.
When you trade CFDs, you
don’t own the underlying
product, but rather bet
on the price movement of
that product, which means
you can take advantage of
prices moving up or down in
value. When trading a CFD
you are trading in multiples
of the
value of each CFD contract.
For example a UK100 CFD
has a contract size of £10.
This means, for every point
the price moves in your
favour, you gain multiples
of the number of units you
have bought or sold. For
every point the price moves
against you, you will make
a loss.
What are the
advantages of CFD
Trading?
CFDs are a leveraged product,
which means you only
need to deposit a small percentage
of the full value of
your position. This is called
‘trading on margin’. While
trading on margin allows
you to magnify your profits,
remember, losses will also
be magnified as they are
based on the full value of
the position.
This means you could lose
more than the amount you
placed to make the trade.
This is why, when trading
CFDs with LCG, you have
access to risk management
tools, such as guaranteed
stops, which means you
can effectively manage
your risk exposure and cap
your losses, before you
have even placed the actual
trade.Besides the ability to
increase your buying power,
there is no stamp duty
to pay, as you don’t actually
own the underlying asset
and you can also take either
a short (sell) or long (buy)
position, giving you greater
trading flexibility.
Is CFD trading for you?
Trading CFDs is ideal for
active traders with a strong
understanding of the markets.
It’s a flexible, efficient
way to diversify your portfolio
into different global
markets and expand your
trading opportunities.
When you trade CFDs with
LCG, you’ll enjoy tight, industry
leading spreads and
an exceptionally competitive
price.
How to get started
Our multi asset class trading
platform, LCG Trader, let’s you
trade thousands of CFDs directly
from charts on mobile, tablet and
desktop delivering a superior
trading experience on all your
devices. To start trading CFDs,
open a LCG account today, and
experience the power to Trade
Connected.
TRADE CONNECTED
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What is financial spread
betting?
Financial spread betting is a tax free
form of investing, allowing traders
to take a position on whether global
markets including forex, indices,
shares and commodities will go up
or down in value. When you spread
bet, you are not buying the underlying
product, but rather betting on
the price movement of that product,
allowing you to take either a short
(sell) or long (buy) position, giving
you greater trading flexibility. The
spread is the difference between the
sell and buy price of the product you
are betting on. The more the market
moves in the direction you predict,
the more profit you make. The more
the market moves in the opposite direction,
the more you stand to lose.
How do I get started?
Our multi asset class trading
platform, LCG Trader, lets
you spread bet directly from
charts on mobile, tablet and
desktop, allowing to you enjoy
a superior spread betting
experience on all your devices.
Open an account with us
today, and start trading with a
demo account to learn more.
When you’re ready you can
start trading using a live account.
What are the advantages?
Financial spread betting lets you
trade at a time that suits you with
24 hour access to a wide range of
global markets. You can spread bet
on forex, indices, shares and commodities
and because you don’t own
the underlying asset you won’t pay
stamp duty or tax on your profits.
Spread betting also allows you to
take a position which is short or
long, so you’ll have more options and
you can also effectively manage your
risk by using dedicated stop loss
tools.
Is spread betting for me?
Spread betting is ideal for active
traders with a strong understanding
of the markets. At LCG you’ll enjoy
tight, industry leading spreads
across a wide range of global financial
markets so when you spread bet
with us you’ll always get an exceptionally
competitive price. If you
want to diversify your portfolio and
take advantage of market moving
events, then financial spread betting
is definitely for you.
1 Knightsbridge London, SW1X 7LX
TRADE CONNECTED

What is financial spread betting?
Brenda Kelly | Head Analyst
What is financial spread betting?
It’s a tax free form of investing, allowing traders to take a position on whether global
markets including forex, indices, shares and commodities will go up or down in value.
When you spread bet, you are not buying the underlying product, but rather betting on the price
movement of that product, allowing you to take either a short (sell) or long (buy)
position, giving you greater trading flexibility.
The spread is the difference between the sell and buy price of the product you are betting on. The
more the market moves in the direction you predict, the more profit you make. The more the market
moves in the opposite direction, the more you lose.
What are the advantages?
Financial spread betting lets you trade at a time that suits you with 24 hour access to a wide range of
global markets. You can spread bet on forex, indices, shares and commodities and
because you don’t own the underlying asset you won’t pay stamp duty or tax on your profits.
Spread betting also allows you to take a position which is short or long, so you’ll have more
options and you can also effectively manage your risk by using dedicated stop loss tools.
Is spread betting for me?
Spread betting is ideal for active traders with a strong understanding of the markets.
At LCG you’ll enjoy tight, industry leading spreads across a wide range of global financial markets
so when you spread bet with us you’ll always get an exceptionally competitive price. If you want to
diversify your portfolio and take advantage of market moving events, then financial spread betting is
definitely for you.
How do I get started?
Our multi asset class trading platform, LCG Trader, let’s you spread bet directly from charts on
mobile, tablet and desktop, allowing to you enjoy a superior spread betting experience on all your
devices. Open an account with us today, and experience the power to “trade connected”.
TRADE CONNECTED
1

What is financial spread betting?
Brenda Kelly | Head Analyst
What is financial spread betting?
It’s a tax free form of investing, allowing traders to take a position on whether global
markets including forex, indices, shares and commodities will go up or down in value.
When you spread bet, you are not buying the underlying product, but rather betting on the price
movement of that product, allowing you to take either a short (sell) or long (buy)
position, giving you greater trading flexibility.
The spread is the difference between the sell and buy price of the product you are betting on. The
more the market moves in the direction you predict, the more profit you make. The more the market
moves in the opposite direction, the more you lose.
What are the advantages?
Financial spread betting lets you trade at a time that suits you with 24 hour access to a wide range of
global markets. You can spread bet on forex, indices, shares and commodities and
because you don’t own the underlying asset you won’t pay stamp duty or tax on your profits.
Spread betting also allows you to take a position which is short or long, so you’ll have more
options and you can also effectively manage your risk by using dedicated stop loss tools.
Is spread betting for me?
Spread betting is ideal for active traders with a strong understanding of the markets.
At LCG you’ll enjoy tight, industry leading spreads across a wide range of global financial markets
so when you spread bet with us you’ll always get an exceptionally competitive price. If you want to
diversify your portfolio and take advantage of market moving events, then financial spread betting is
definitely for you.
How do I get started?
Our multi asset class trading platform, LCG Trader, let’s you spread bet directly from charts on
mobile, tablet and desktop, allowing to you enjoy a superior spread betting experience on all your
devices. Open an account with us today, and experience the power to “trade connected”.
TRADE CONNECTED
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