3

Risk management for the margin trader

Risk should always be foremost in the mind of the online trader. When traders get a position wrong, be they private traders or the professionals, more often than not it is because they get their risk management wrong. Many, many investors who plunge into financial spread betting pay little attention to risk, or simply do not understand the sorts of risks they are taking on. They end up losing money, become downhearted, close their accounts and go on to do something else.

Spread betting is not like investing in a mutual fund. Opening a trade and letting it run without having adequate built in protection can cost you a lot of money. Nobody else is going to pay attention to your active positions. It is ...

Get The FT Guide to Financial Spread Betting now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.