Spread Betting_ Stop Losses or Guaranteed Stop Loss Orders_

Everybody who trades stocks using spread bets on margin should use a stop loss tool. A stop loss order works by cutting your spreadbet off at a pre-determined point that you define when you initiate the trade. A stop loss allows you to protect yourself from potential losses and allows you calculate the amount of loss you are willing to accept on any trade.

In spread betting a stop loss can also act as a means of locking in profit near the price point you wish the trade to be closed, if the stock is not performing. Therefore, when the stock is profiting, you can steadily adjust this stop loss level to begin to lock in more and more profit. When the share begins to trace back (up/down, depending on your trade), you will be closed out and the stop loss executed.

So for instance if you open a long spread bet on PV Crystalox Solar plc [PVCS (London)] stock which is trading at 70p with a stop loss order at 65p and PVCS falls in price the bet is closed at 65p (for a loss). You may lose a bit more profit or a lot less if you have a stop loss order to protect your trade. This is because a stop loss takes a few seconds to close out the trade, by the time this process has completed and depending on how volatile the trade is, then you will be closed out near the actual stop.

While a stop loss is useful in limiting losses it is not foolproof. https://hastexashirednicksabanyet.com/understand-the-proper-poker-gambling-laws-in-texas/ Let's suppose PV Crystalox solar plc (PVCS London) issued a surprise profit warning, and the share price fell instantly from 70p to just 58p in one sweep. The stop loss here would be broken and your spreadbet would be closed at 58p rather than 65p because the stock never traded at 65p.

To protect against this occurrence spread betting providers offer a solution in the form of a 'guaranteed' stop loss for an additional small premium. A guaranteed stop loss order can be used to ensure that spread betting trades are stopped at a specific point. It is basically the same thing as a stop-loss order except that you will be closed at the exact point you request, regardless of how volatile the stock. This fee varies from broker to broker. Most common is a change to the initial spread. This can mean adding a few more points either side, or charging a percentile fees. These fees are based on trade type and trade value. They are taken from your account margin. https://dgtl-lve.com/how-to-increase-your-odds-of-winning-the-lotto/ Whether or not you are willing to pay for the additional cost of the guaranteed stop loss depends on the degree of risk you are willing to absorb but in these hyper-volatile markets using guaranteed stop loss order can be a good idea.