Understanding the risks
Halifax Spread Trading is a product which you can use to speculate on the price movement of an investment, whether it’s rising or falling. It is important to remember that Spread Trading is designed for experienced traders and carries a high level of risk to your capital. You should only trade with money you can afford to lose. It is possible to quickly lose substantially more money than your initial deposit.
Key Risks of Spread Trading
- Spread Trading is a leveraged product and it is possible to lose substantially more money than your initial deposit.
- To maintain open positions, you may be required to make further deposits at short notice. Find out more about margins and margin close out.
- Spread Trading is a high risk product designed for experienced investors where it fits with their personal circumstances.
- You should not open a Spread Trading account unless you fully understand the risks involved.
- Tax laws can change.
- During a volatile market, market gapping can occur.
- Unlike standard share dealing you have no right to the underlying financial instrument (including voting rights).
- Foreign Currency Conversions are required on trades which settle in a currency other than your base currency.
- Over The Counter stocks carry a high level of unpredictability and illiquidity, meaning their risks for trading are much greater.
- You will be required to complete an appropriateness test to assess whether your personal circumstances suit Spread Trading.
Spread Trading is a leveraged product which means you only need to deposit a small percentage of the overall trade value. If the price moves against you then it is possible that you could lose substantially more than your initial deposit. Find out more about margins.
There are ways in which you can control the level of risk exposure. Find out how to manage your account and which tools you can use to help limit your risk.
If you are ready to apply for a Halifax Spread Trading Account, why not take part in our Trading Academy. This allows you to trade with a reduced minimum stake of 50p per point for the first four weeks you have your account. Please be aware that the same risk applies in the trading academy and the standard account and you may lose significantly more than your initial deposit.
If you are unsure whether a Spread Trading account is right for you, we have a range of accounts to suit all investors. Have a look at our accounts.
Halifax Spread Trading is provided by City Index Ltd and therefore your contractual relationship is with City Index.
City Index Limited is authorised and regulated by the Financial Services Authority (FSA Register Number 113942).
If you’re thinking of applying for a Halifax Spread Trading Account, please make sure you’ve read, and taken the necessary steps to understand, the Important Information and Key Risks of Spread Trading.
