Considering your stake size before spread betting

Before you begin spread betting it is worth taking some time to consider how big a size your stake will be when you are entering a trade.  It would be weighed up with the pros and cons of the trade you are about to bet on and how much your potential gains and losses might be.  You want to make a reasonable sized return yet you also don’t want to make a huge loss which consequently prevents you from further spread betting.

If you are in a stop loss situation then the size of your stake is critical as if the stake is too large you may not be able to fully implement your stop loss at the right time.  Most professional spread betters believe that 0.02 to 0.05% of the available trading capital should be your stake size.  In layman’s terms this is 20 pence in one thousand pound of the trading capital.

Even if you follow the rules of spread betting and remain sensible with your stake sizes there will always be a risk that you might lose.  However, in such instances you shouldn’t increase your stake as this will lead to an even more significant loss. This is particularly true if the stock is not performing well on the markets.