Financial Spreadbet

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					                                                      Beginner’s Guide to Financial Spread Betting


What is Spread Betting?........................................................................................... 2
 What are the advantages? ...................................................................................... 3

Open an account ....................................................................................................... 5
 How do I open an account?..................................................................................... 5
 How can I fund my account? ................................................................................... 5
 How do I get my money back? ................................................................................ 5

How to make an online bet:...................................................................................... 6
 Log into your account .............................................................................................. 6
 Calculate the minimum deposit ............................................................................... 7
 Deposit funds online ................................................................................................ 8
 Select a product and make a bet:............................................................................ 9
 Refining your selection .......................................................................................... 10
 Add products to "My Portfolio"............................................................................... 11
 Place your stake .................................................................................................... 11
 Make a bet/trade:................................................................................................... 12
 Bet/trade confirmation ........................................................................................... 14
 Reviewing your position:........................................................................................ 15
 View and/or amend your stop loss ........................................................................ 16

Stop Losses, New & Limit Orders ......................................................................... 17
  Stop Loss Orders................................................................................................... 17
  Viewing your stop-loss........................................................................................... 18
  Amending your stop-loss ....................................................................................... 19

Orders ...................................................................................................................... 20
  Limit Orders ........................................................................................................... 20
  Creating a New Order............................................................................................ 22




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                                    Beginner’s Guide to Financial Spread Betting




What is Spread Betting?
Financial Spread Betting is a tax free, cost effective alternative to traditional
share trading. It allows you to speculate on the movement of stocks and
shares without using a stockbroker, therefore you do not have to pay
commission or fees. We make a spread around the live, underlying market
price and you can bet on whether this market will rise or fall.

How does it work?
The "spread" in the phrase Spread Betting refers to the Sell (Bid) and Buy
(Offer) price quoted by a Financial Spread Betting company. This price is
calculated by adding additional points around the live (or the estimated future)
market price of a financial product. For example, if the Daily FTSE is trading
at 4729 our quote might be 4727-4730.

At E*TRADE, only small deposits are required to open a new position (as little
as £10-£40 for a £1 bet depending on the market concerned). Once you have
chosen the market on which you wish to bet, you can then bet the stake of
your choice, which will represent your profit or loss per point movement in that
market (each market has its own individual maximum allowable stake).

You can then bet £1 (or $1 or €1) per point/tick on the movement of spread
prices that we quote. You can choose to bet that the market will rise, or
alternatively, you can bet that it will fall. If you are right, you will make a profit
of your stake multiplied by each point that the market moves in your favour. If
you are wrong you will make a loss of your stake multiplied by each point that
the market moves against you.

For this reason you must be aware that your losses can increase dramatically
if the markets move substantially in the opposite direction to your bet (i.e. if
you make an Up Bet in the FTSE 100 and instead of going up it goes down).
All Financial Spread Betting profits are recognised as the winnings of a bet,
and are therefore free of Capital Gains and Income Tax in the UK.

Try a Demo Account
If you are new to Spread Betting, we highly recommend that you sign up for
our online Demo Account. The Demo Account mirrors our live trading system
in all respects, other than the requirement for depositing funds! Used in
conjunction with our online Beginners Guide you can really get to grips with
the concept of Financial Spread Betting or familiarise yourself with our trading
platform before you begin Live Trading.

Why should I spread bet?
Spread Betting allows you to bet on a huge variety of financial products in one
place and in one currency. You make your bets in one of 3 currencies


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                                    Beginner’s Guide to Financial Spread Betting


(Sterling, US dollars or Euros), which means you do not have to bother with
costly exchange rates and can, in general, trade in your own currency.

Spread bets are margined trading products, which means you need only
deposit a small percentage of the full value of your trade leaving your excess
capital to continue working hard elsewhere. For example, a £1 bet on a share
is the equivalent of buying (or selling) 100 real shares. On most shares our
minimum Initial Margin Requirement (deposit) is 3-5% of the underlying value
of the shares which means that you can take a bet in a share with as little as
1/30th of the money required to buy the actual real shares from a stock
broker.

Also, with E*TRADE, you do not pay any commission or fees when you trade.
We make our profit from the spread we add to the underlying market prices,
which result in our quotes. Plus, don’t forget, that UK residents benefit further
because your profits do not incur Capital Gains and Income Tax.

Whilst Financial Spread Betting offers many benefits, it is important to note
that it carries a high level of risk to your capital, so you should only bet with
money you can afford to lose. Whilst we offer compulsory stop-losses, it is
possible for you to lose more than your initial deposit.

What are the advantages?
   •   Bull or Bear
       One of the most obvious advantages of Financial Spread Betting is the
       unique opportunity to go short of (or sell) a stock or share. You can therefore
       experience the benefit of either a rising or falling market!
   •   No Commission or Fees
       We do not charge commission or fees. The only “fee” is the spread we charge
       on the prices that we quote.
   •   Gearing
       Financial Spread Betting also allows you to trade in sizes smaller than those
       usually available in the underlying market. Similarly, you may also benefit
       from an opportunity to trade in larger positions than are normally permitted in
       the underlying market, without depositing large sums of money.
   •   Tax Free Profits
       All Spread Betting profits are recognised as the winnings of a bet, and are
       therefore free of Capital Gains and Income Tax.
   •   Tight Spreads
       At E*TRADE our mission is to provide value for money plus top quality
       service. You’ll find our spread quotes far better value than most of our
       competitors. In some cases, you will find that our spreads are extremely
       competitive in relation to the underlying, live market quotes.
       For example, our Daily Rolling FTSE spread is just 2 points and our Daily
       Rolling Sterling/Dollar quote is just 4 points. Compare our spreads to that of
       our competitors.
   •   Limit your Risk
       Spread Betting is a high-risk activity, but at E*TRADE we want you to enjoy
       your Financial Spread Betting experience. The automated stop-loss facility we



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                                   Beginner’s Guide to Financial Spread Betting


      provide is an invaluable tool which encourages you to understand and control
      your risk. Although you must be aware that stop-losses are not guaranteed.
      Your stop-loss is set according to the funds available on your account up to a
      maximum computer-generated level. You can amend your stop-loss to suit
      your needs. We also hold an additional 20% of your funds to allow for
      slippage or a market gap.

Risks
Although you can make substantial profits from Financial Spread Betting, if
the markets move against your bet, your loses can also be substantial and
although E*TRADE has a policy of attempting to limit client losses on bets by
applying an automatic stop–loss to each bet you make, these stops are not
guaranteed. As a consequence, if a market gaps, you may lose more than
your initial deposit.

Why should Financial Spread Betting interest me?
Spread Betting appeals to a wide variety of individuals who want to take
advantage of the versatility and great value that Spread Betting can offer.

Experienced investors use Financial Spread Betting as an additional trading
tool as the spreads we offer rival the prices available in the real market.
Alternatively, many investors use Financial Spread Betting to hedge their
existing share portfolio. For example, if you have some shares which are
decreasing in value in the short-term, you could “Sell” the value of the share
using a sell bet with E*TRADE and possibly make a profit to counter-balance
the decreasing value of your shares.

You do not need to be an experienced investor to spread bet, but you do need
to research the products that you wish to trade and be aware of the risks
associated with Financial Spread Betting. Many individuals new to Financial
Spread Betting use technical analysis to guide their investment decision.
E*TRADE provides charts for every product we quote to assist you with your
technical analysis.

One of the problems for Spread Betting companies is the word ‘betting’ as this
gives a false impression to the marketplace. Financial Spread Betting is in fact
a highly adaptable trading tool. With an E*TRADE account you can trade in
many financial products using just one currency – we offer prices on UK,
European & US shares, World Indices, Commodities, Foreign Exchange,
Bonds and STIRS. You can bet on the Cash, the Future or our Rolling Daily
products.

Glossary:

Underlying Markets : our quote is always based upon the prices received
from the various financial exchanges around the world. These prices are the
'underlying markets'.




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                                  Beginner’s Guide to Financial Spread Betting




Open an account
How do I open an account?

To begin trading today, please complete our online application form. This can
be found as a link on the home page (Open an Account). This should take no
more than 10 minutes. You will be asked to select the type of currency you
wish to trade in, so be sure that you select the currency you require. We then
conduct an electronic check to confirm your identity and address.

If you are a UK resident, and we are unable to confirm that you reside at the
address you have listed in your application form, we will require additional
information in the form of an ORIGINAL bank statement or utility bill from the
last 3 months. If you are not a UK resident, we will require proof of your
address AND a copy of your passport/drving license. You can fax these
documents to us on +44 (0) 845 210 0177, but then please post them to us at
your earliest convenience to E*TRADE Spread Betting, 51/55 Gresham
Street, London EC2V 7EL.

If you would like to nominate someone to trade jointly on your account please
contact our customer support team: support@etradespreadbetting.com or +44
(0) 845 210 0377

How can I fund my account?

Once your account is open, you can deposit funds securely online using a
debit or credit card (2% charge for credit cards). Alternatively you can pay by
telephone, send a cheque made payable to E*TRADE Spread Betting or
directly into our bank account. Please contact us for our bank details: +44 (0)
845 210 0377.

How do I get my money back?

Please email us with instructions to make a refund to your card. We will
require your E*TRADE account number and the last 4 digits of your card as
confirmation of this transaction. You can also make this instruction by
telephone +44 (0) 845 210 0377.

We can also arrange to send you a cheque or make a direct payment into
your bank account.




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                                  Beginner’s Guide to Financial Spread Betting




How to make an online bet:
Financial Spread Betting with E*TRADE couldn't be simpler. For greater
speed and anonymity, you can trade online or if you prefer, we also offer a full
telephone service. Please note that you will need an email account as
contract notes are sent via email and your statement is only available online.
The following information gives you a step-by-step guide on how to make a
spread bet with E*TRADE.

If you require some specific help you may find our Customer Support section
useful. This area covers items such as Technical Support and Managing Your
Account.

Important notes:

1. Please note that every bet/trade generates an automatic stop-loss which
you can amend, if you wish, by going to the Order Book section of your
account. These stops are not guaranteed.

2. Please do not assume that we operate our business in the same way as
other Spread Betting companies.

3. Full details of how we conduct our business can be found here, in our terms
& conditions, which can be found in the Customer Support section of our
Website.

4. If you have any questions at all, please don't hesitate to contact us either by
email on support@etradespreadbetting.com or telephone +44 (0) 845 210 0377.



The instructions provided here relate to both a Live Trading Account and
Demo Account.


Log into your account

Log in to your account using your chosen username or password. If you have
forgotten either of these please contact us by telephone on +44 (0) 845 210 0377.



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                                  Beginner’s Guide to Financial Spread Betting


If you have a Live & Demo account, the two accounts are completely
independent of one another and therefore you will require different usernames
and passwords for each account.

You can log in to your Live account by entering your username and password
details in the box on the right hand side of the home page (see image below).
To log into your Demo Account please click on the Demo Account Log In
button on the homepage.




Calculate the minimum deposit

Before you begin trading, you will need to deposit some funds into your
account. You can calculate the minimum amount required by looking at our
Product Information sheets which are found on our homepage

To calculate your minimum deposit, select the product you wish to trade and
then multiply your stake (i.e. how much you wish to bet per point) by the
Minimum IMR detailed in the Product Information.

For example, if you wish to bet on the Daily FTSE with £1 per point, you
would multiply £1 x 30 (Min IMR for Daily FTSE), your initial deposit would be




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                                  Beginner’s Guide to Financial Spread Betting


£30. If you want to make a bet on a share, you can find details of the Min IMR
on our website in the information button located to the right of the product.




Your automatic stop-loss is calculated as 80% of the funds on your account,
or if you have sufficient funds on your account, the system will generate a
stop-loss calculated at 80% of the Max CGSL (computer generated stop-loss).
If your stop-loss is set at the MAX CGSL level, you can move it closer in or
further away by amending your stop-loss (see details to follow).

In the Daily FTSE example above therefore, your stop-loss will be set at 24
points away from your opening trade. This means you can only lose a
maximum of £24. More information about Stop-Losses follows.


Deposit funds online

Funds can be deposited online using a debit or credit card (2% fee for credit
cards) or over the telephone. To deposit funds online, click the "Credit My


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                                 Beginner’s Guide to Financial Spread Betting


Account" button and follow the instructions. Further details about depositing
funds can be found in the Customer Support section.




Select a product and make a bet:

Once you have logged into your Account, you should see this screen. If you
experience problems logging in, please go to the Customer Support section of
our website and click on the Technical Support. Alternatively, you can email
support@etradespreadbetting.com us or call us on +44 (0) 845 210 0377.




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                                 Beginner’s Guide to Financial Spread Betting




If you wish to make a bet on a Share, please click the Shares button in the
navigation bar at the top of the screen.

Refining your selection

You can select which Shares you'd like to see by clicking on the Share
Lookup Table dropdown menu:




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                                  Beginner’s Guide to Financial Spread Betting




Add products to "My Portfolio"

Once you have located the appropriate product/share, you can click the
symbol (circled on screenshot above) to the right of the screen to save the
product to "My Portfolio". This information will be stored in the My Portfolio
section of your account for the next time you wish to log in.

Place your stake

Once you have located the product you wish to trade, add your stake (i.e. the
amount you wish to bet per point) to the stake box as shown below:




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                                 Beginner’s Guide to Financial Spread Betting




Make a bet/trade:

Click the Trade button and our Auto Quote trading ticket will appear:




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                                   Beginner’s Guide to Financial Spread Betting




Now all you need to do is decide if you wish to buy or sell. Live prices will
continue to update until you click the buy or sell button

Click the appropriate (either buy or sell) button and once your trade has been
accepted you will get on screen confirmation plus confirmation by email.

If the timer hangs for more than 25 seconds the trade will not be done. If it
hangs for more than 25 seconds, please refresh your browser and call us to
see if your trade has been done.




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                                 Beginner’s Guide to Financial Spread Betting




Bet/trade confirmation

If you notice any discrepancies, please contact us immediately, by telephone.




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                                  Beginner’s Guide to Financial Spread Betting




Reviewing your position:

If you now click on the Open Positions button, you will see your new trade:

Click the circled button to see full information of trades made on this product.
You will find your automatically generated stop-loss in the Order Book section
of your account. This section will also hold details of Limit or New Orders.




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                                 Beginner’s Guide to Financial Spread Betting




View and/or amend your stop loss

You can find your automatically generated Stop-Loss if you click on Order
Book.

You can see this Order type is a Stop-loss (see circled area).

Click the Amend button to amend your stop-loss.




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Stop Losses, New & Limit Orders
Stop Loss Orders

A 'Stop Loss Order' is the method used to limit the losses on an individual bet.
It literally means 'when the loss on a bet reaches the point where I no longer
wish to risk any more money then close me out of my bet' (or 'Stop' me out).

E*TRADE has a policy of attempting to limit client losses on bets by applying
an automatic stop–loss to each bet you make but these stops are not
guaranteed. As a consequence, if a market gaps, you may lose more than
your initial deposit.

A stop-loss is automatically generated every time you make a new bet. This
stop level will be quoted on the deal ticket and will be repeated in your e-mail
deal confirmation. The stop-loss level applied is based on 80% of the funds
available in your account or it will be set at the Max CGSL (Maximum
Computer Generated Stop-loss). Details of the Max CGSL for each product
can be found in our product information. This can be found by clicking on the
Product Information link on any page.




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                         Beginner’s Guide to Financial Spread Betting




Viewing your stop-loss




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                                   Beginner’s Guide to Financial Spread Betting


Amending your stop-loss

If you wish to move the 'Stop' level of your stop-loss simply click on the Order
Book section of your account, and then click the 'Amend' button next to the
relevant 'Stop' order. You will then find you are given the opportunity to
change the price in the 'Level' field.




Stop-losses cannot be cancelled - they can only be amended.

Every market has a minimum distance from the current price at which any
Stop-Loss will be accepted. You may move the stop further from the current
market price provided your account has sufficient funds to do so - the system
will not permit you to move your stop level beyond such available margin.

When a position is closed, the stop-loss relating to that trade will be
automatically cancelled and you will receive an email to confirm this.

All stops are effectively Good Till Cancelled 'GTC'.




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                                   Beginner’s Guide to Financial Spread Betting



Orders
You may create two types of Order within our system, a 'Limit order' or a 'New
order'.


Limit Orders

A 'Limit' is a specific order placed against an existing open bet and is often
used as a method of taking your profit on an open position when the
E*TRADE quote reaches a level at which you wish to exit your bet (i.e. it is
more generally considered to be the opposite of the Stop loss as it could be
called a Take Profit order).

In the E*TRADE system a 'Limit' order must match exactly the size on any
single open bet not the total position (if you have a total position of £20 in a
market but this is made up of two £10 bets, you will have to place two 'Limit'
orders).

Each Limit Order is assigned an open position to which it refers, if you click on
the Information icon on the relevant order you will be able to identify which
open bet the 'Limit' order refers to.

To create a Limit Order, click on the Limit/OCO (OCO means One Cancels
Other) button and enter the level at which you wish to close your position.




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                                 Beginner’s Guide to Financial Spread Betting




To create a Limit Order, click on the Limit/OCO button and enter the level at
which you wish to close your position.


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                                   Beginner’s Guide to Financial Spread Betting


When a bet that has a Limit order attached to it is closed or partially closed
the Limit order will be either cancelled or amended to reflect the lesser
remaining bet stake amount.

Placing a Limit order and thus attaching it to an existing bet creates an OCO
or One Cancels Other order because either your Stop or your Limit will be
executed if you do nothing and the market moves to either level.

'Limit' orders may be Good Till Cancelled (GTC), Good Till End of Day, (GFD,
which is good till the last time that E*TRADE quotes that market on that
business day or the time that that market closes, whichever is earlier) or Good
Till UK Time (which is good till a date and time specified by you).


Creating a New Order

A 'New' Order is an instruction to open a new bet at a level of your choice. It
is not attached to any existing bet and is independent of any other instruction.
A New order is used to open a new bet at a level in the market, which has not
yet been reached.

A 'New' order is different from a 'Limit' order because a 'Limit' order is
cancelled when the relevant position to which it applies is closed.

To create a New Order, place your stake in the stake box and click on the
Order button.




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Beginner’s Guide to Financial Spread Betting




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                                   Beginner’s Guide to Financial Spread Betting


The 'New' Order functionality is useful for placing orders at critical market
points so that you do not have to be watching the markets every moment of
every day to ensure that you do not miss an opportunity.

When a New order is executed, it creates a new Stop-loss order automatically
because a new bet has been taken. You may then add a Limit order to this new bet if
you wish.




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