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Trading News Spread traders make money in a recession
Trading News Spread traders make money in a recession
Spread traders make money in a recession |
| Written by Trader Hideout Editor | |||
| Thursday, 04 June 2009 11:55 | |||
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With the current economic climate being as it is, people everywhere are feeling the pinch whether they are in debt or not. The return on savings has all but disappeared, pensions have fallen drastically and the value of many a portfolio of stocks and shares has decreased dramatically. Yet there are still people making money, and lots of it, during the recession and many of these are spread traders. When you make an up-bet on shares using spread betting, you risk the same as buying shares in the normal fashion but you avoid paying stamp duty and there is no stockbroker holding his hand out for commission.Spread betting companies obviously make their money too and this is worked into the spread, so the bid and offer price on a share through a spread betting company will be slightly wider than that through a stockbroker. But still, the cost comparison is still competitive if you are looking at spread betting over six months or less. The main advantage with financial spread trading though is the option of going ‘short’ on a share and this is where spread traders will have made their money in the last year or two – you make money if the price of the share drops. It is this feature of spread betting that has made it popular as spread traders are able to turn a profit even whilst everyone else loses their money during the tough times.
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