forextra: Before you begin spread betting it is important that you fully understand the risks involved.
Spread betting is a leveraged product
With any trading product that is said to be ‘leveraged’ the profit and loss potential becomes highly magnified. Leveraged products, also known as ‘margin’ products, usually require the investor to outlay only a small percentage of the total cost of the underlying asset. The magnification of potential returns on investment is a key reason for the increasing popularity of financial spread betting.
Let us then explain the effects of leverage using a…
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