Financial Spread Trading allows you, an investor, to trade on the directional movement of the price of a financial instrument. You will have to indicate an amount you want to trade on each point movement. For each point movement that the price of the financial instrument moves in your favour, you make a profit. If the price of the financial instrument moves against you, you will make a loss.

When you trade on the price of the financial instruments, you do not actually own the underlying asset. However, you are entitled to some of the benefits, such as dividends, rights issues etc, as if you were an owner of the underlying asset. The main difference is that you will not receive any voting rights on individual equities.

When you are holding a "long" trade on an individual equity, you will receive a credit adjustment in your trading account if a dividend is issued on the physical equity. The adjustment is equivalent to the net dividend payment due on the underlying equities. On the other hand, if you are holding a "short" trade on an individual equity, there will be a debit adjustment which is equivalent to the gross dividend. Other corporation actions such as bonuses and stock splits will also be adjusted according to the underlying equities.

Spread Co does not charge commissions on trades. All the trading charges are incorporated within the spreads that you trade at. Additional charges are made when you hold a long trade open overnight. This is a financing charge to hold the trade open. In reverse, you will receive a credit for short trades held open overnight, as set out below:

Financing Interest

Spread Co will charge/credit you interest on your open equity and indices trades which are held open overnight. On a short position you will receive interest, and on a long position you will pay interest, in each case with the applicable haircut.

Rollover Interest

Spread Co will charge/credit you rollover interest on your open FX and bullion trades which are held open overnight. When trading a currency pair, each currency has an interest rate applicable to that currency. With an FX trade, you are long one currency and short the second currency, thus the net difference is the interest rate differential you pay or receive on the value of the position. You will receive interest differences if you are holding a long position on the currency which has a higher interest rate and pay interest differences if your are holding a short position on the currency which has a higher interest rate.

Financing and rollover charges are not applied to forward trades as they incorporate a cost of carry within the price to the expiry date.

Examples of corporate actions and financing

For each of your open trades, Spread Co will require you to place a deposit known as ‘margin’. Because you do not have to pay the full amount of your trade size, Spread Trading allows you to increase the amount of exposure to a financial instrument through leverage. This means you can place a larger trade than if you traded using simply the funds you placed in your account. Leverage has the effect of magnifying the profits or losses on your trading capital. The maximum amount of leverage available to you varies with the instrument you are trading.

If you wish to place a trade, you will need to place a ‘deposit’ in respect of each open trade in your account. These ‘deposits’ are also known as ‘margin’. The margin for opening a Spread Trade for all trades other than those with an attached guaranteed stop order depends on two variables:

• Notional Trade Requirement (NTR)

  The NTR is actually a risk factor applied to each financial instrument. This factor varies according to the liquidity and the volatility of each financial instrument. Markets which have higher liquidity and lower volatility generally have a lower NTR.

  The NTR for indices, foreign exchange, commodities and bullion is the risk factor applied to the relevant financial instrument. The NTR for equities is a percentage of the notional value of your trade. Details of the actual NTR can be found on the trading platform.

• Stake

  When you place your trade, you will need to decide on how much you wish to trade per point. You can trade £1, £3 or £5 per point on any financial instrument. This amount is known as a stake. You can also choose to trade in USD or Euros.

  Your stake is a per unit stake, as opposed to a fixed stake. The size of your stake determines how much you make or lose for one unit movement in the price of a financial instrument. The more the price of the financial instrument moves in your favour, the more profit you make and similarly the more the price moves against you, the more you lose. For this reason, it is important you understand that if the price of the financial instrument moves substantially in the opposite direction, your losses can increase considerably.

Margin for Indices, Foreign Exchange, Commodities and Bullion Trades

The margin for indices, foreign exchange, commodities and bullion trades without attached guaranteed stop orders is derived by multiplying the Notional Trade Requirement (NTR) by your stake.

For indices, foreign exchange, commodities and bullion trades with attached guaranteed stop orders, the margin requirement is equal to the maximum loss that you can incur on that trade.

Example

NTR for the UK100 = 30

You wish to buy the UK100 with a stake of £5 per point

Margin for Individual Equities

For equity trades without attached guaranteed stop orders, margin is calculated by multiplying the NTR by the stake by the trade price for the relevant equity.

For equity trades with attached guaranteed stop orders, the margin requirement is equal to the maximum loss that you can incur on that trade.

Example

NTR = 10%

You wish to buy British Airways with a stake of £5 per point

British Airways is trading at 234.80/235.05

A margin call occurs when there is insufficient funding in your account to cover your open trades with the necessary margin. This happens if your account valuation falls below the margin requirement. Limited Risk Account holders will not receive margin calls.

To view an example on margin call, please click here.

You will be emailed every four hours to inform you that you are on margin call.

If you are on a margin call, you must top up your account with cash or close your open positions to reduce your margin requirement.

If you don't top up your account or reduce your open positions, one or more of your trades will be closed in order to bring the margin level in your account up to the required level for the remaining open trades.

No. Spread Trades are cash settled.

There are two main ways in which you can profit from Spread Trading:

1. Buy at one price then sell at a higher price
2. Sell at one price then buy at a lower price

The two main ways to lose through Spread Trading:

1. Buy at one price then sell at a lower price
2. Sell at one price then buy at a higher price

Liquidation is the forced closure or reduction of your open trades. Liquidation occurs when your resources fall significantly below the level required to maintain your margin requirements.

Your trading account is subject to a liquidation process if your account valuation falls below a percentage of the margin requirement (liquidation level) which is required to support your open trades.

The open trades which require the largest margin requirement will generally be liquidated first

The liquidation engine will cut the open trade with the largest margin requirement. A liquidation trade will be inserted to close the open trade at market price. Trades will be automatically matched based on a FIFO basis.

Note: Liquidation will not occur on trades which have linked stop losses.

No, there will be no extra charge if you get liquidated. You will be subject to the normal cost for Spread Trading.

The liquidation process will stop only when account valuation is more than the margin requirement.

There is no minimum account balance which is pre-set. However, you must maintain sufficient deposited funds in your account to cover the NTR for your open positions, or you will face liquidation of one or more positions.

Yes your open trades are marked-to market with real time mid prices.

The open profit/losses is the real time value of the profit/losses on open trades.

The closed profit/loss is the day’s realised profit/losses. It is the profit/loss that is derived after you close off your trades.

A Limited Risk Account is one in which a guaranteed stop order will automatically be created for every trade opened.

To learn more about Limited Risk Accounts, please click here.

You may hold on to your trades for as long as you like (provided your trade is not liquidated). This is subject to a period of three years.

Trading resources shows the funds that are available for entering into additional trades. It is the difference between account valuation minus margin requirement.

Account valuation is the aggregate of cash balance + open profit/loss + closed profit/loss.

The minimum stake size depends on the instrument, and is typically one unit for any share, index or commodity or bullion. See Market Info for further details of minimum stake sizes with Spread Co.

There is effectively no maximum stake size which Spread Co will trade with you. However, trades of large stake sizes may be more expensive for you to enter into than normal size trades.

You can trade at any time (24 hours) between 10pm (London Time) on Sunday evening and 10pm (London Time) on Friday evening. You will not be able to trade outside of these hours.

You can apply online here, or you can request an account opening pack be sent to you. Please call 0800 0789 398, or +44 (0) 1923 832682 for international callers, or email us here to request this.

Please call 0800 0789 398, or +44 (0) 1923 832682 for international callers, or email us here to request this.

We will assess your application to ensure that Spread Trading is an appropriate product for you. We will also verify your identity and address. If you are a UK resident, we will do this using a third party identity verification service; if you are not a UK resident, you will need to send the requisite additional documents to us by fax or mail.

We will then process your account application. You will be notified of the status of your application by email. If you do not receive an email within 2 days of submitting your application, please call the Account Opening Team on 0800 0789 398, or +44 (0) 1923 832682 for international callers.

Once your account is approved, you will receive a trading account number, username and password by email.

You will then be able to log into the trading platform. Once you have deposited funds into your account, you can begin trading using real time prices.

1. The Account Opening Form
2. Terms of Business
3. Summary of our Execution Policy
4. Conflicts Policy
5. Fees List
6. Deposit Assistance Schedule

You should first read the Terms of Business, Summary of the Execution Policy, Conflicts Policy and the Fees List. Then please complete and sign the Account Opening Form and return it to us. If you are not resident in the UK, you will also need to send the documents listed in the next FAQ so that we can verify your identity. You should send all the documents to:

• Account Opening Team
• Spread Co Limited
• 1st Floor North, Argyle House,
• Joel Street
• Northwood Hills
• Middlesex
• HA6 1LN
• United Kingdom

You will need to provide 1 document from each of the 2 sections below.

Identity documents

• - Certified copy of your passport
• - Certified copy of your driving licence
• - Certified copy of a valid national identity card

Address Verification

• - Certified copy of a utility bill (dated within the last 3 months)
• - Certified copy of a Bank, building society, credit card, mortgage or other financial services provider statement (dated within 3 months)
• - Certified copy of a tenancy agreement (dated within 6 months)

These documents must be certified. Documents can be certified by one of the following:

• Officer or director of an authorised financial institution
• Practicing lawyer
• Accountant
• Notary public
• Member of the judiciary
• Civil servant
• Serving law enforcement officer

The words "Certified as a true copy of the original" must be stamped or written on these documents in addition to the name and signature of the persons certifying the documents.

You should check to ensure that:

1. The account opening form has been fully completed and is signed and dated.
2. Photocopies of proof of identity and proof of address documents are included and have been certified correctly (in the case of overseas applicants).

After we receive all the relevant account opening documents, we will process your account application. You will be notified of the status of your application by email. If you do not receive an email within 2 days of submitting your application, please call the Account Opening Team on 0800 0789 398, or +44 (0) 1923 832682 for international callers.

Once your account is approved, you will receive a trading account number, username and password by email.

You will then be able to log into the trading platform. Once you have deposited funds into your account, you can begin trading using real time prices.

If you have any questions about opening an account, please call our Account Opening Team on 0800 0789 398, or +44 (0) 1923 832682 for international callers. Alternatively, you can email us here.

To log in to your live account, please use the username and password provided to you. Please enter these details in the relevant boxes at the top right hand corner of the website http://www.spreadco.com and select the 'live' option. For instructions on logging into the downloadable version of the trading platform, please click here.

Please go to http://www.spreadco.com and click on 'Forgotten Password' in the top right hand corner of the website. You will automatically receive a new password via email. Please do not copy and paste your password from the email into the password field on the trading platform. It is best that you type it in manually.

After 3 failed attempts, your access to the trading platform will be suspended for security reasons. Please contact our Customer Services Team to unlock your password.

To amend any of your personal details, please contact the Account Opening Team to request a ‘Personal Particulars Form.’ Please complete and sign the form, and return it to:

• Update Personal Particulars
• Spread Co Limited
• 1st Floor North, Argyle House,
• Joel Street
• Northwood Hills
• Middlesex
• HA6 1LN
• United Kingdom

Please note, if you wish to change your address details, you will need to provide us with a certified proof of address for your new address.

If you wish to close your account, you will need to either send, a signed Closure of Account request by post to:

• Account Closure
• Spread Co Limited
• 1st Floor North, Argyle House,
• Joel Street
• Northwood Hills
• Middlesex
• HA6 1LN
• United Kingdom

Or send us a Closure of Account email, from the email address registered for you in our system. Once we are satisfied that the account is in order and that all trades have been closed and there are no outstanding items, we will change the account status to CLOSED. Should there be outstanding open positions, we will inform you that we are unable to proceed with the account closure request. You must close all open positions before we will permit you to close your account.

Please click here. Once you have completed the relevant details, you will receive an 'Account Activation Confirmation Notification' email. In this email, there will be a username and password. To log into your demo account, please enter the username and password at the top right hand corner of the website http://www.spreadco.com and select the 'Demo' option. For instructions on logging into the downloadable version of the trading platform, please click here.

The minimum initial deposit for spread trading is GBP100, or currency equivalent

You can fund your account by credit or debit card, bank transfer or cheque. In order to meet money laundering regulations, we will only accept payment from a card or account registered in your own name and not that of any third party.

To fund your account for the first time by debit or credit card, you will need to telephone us on +44 (0) 1923 832622 to register your card with Spread Co. Online payments may also be possible through our website.

You can use the following information to fund your account via bank transfer. Please note that all currencies share the following details:

• Account Name: Spread Co Limited
• Address: Barclays Bank PLC, Acorn House, 36-38 Park Royal Road,
• London, NW10 7WJ, United Kingdom
• Swift Code: BARCGB22
• Sort Code: 20-92-60

Please check the grids below for the relevant account number and IBAN.

For Retail Clients:

Cheques:

Please make your cheque payable to Spread Co Limited and send it to:

• Spread Co Limited
• 1st Floor North,
• Argyle House,
• Joel Street,
• Northwood Hills, HA6 1LN.
• United Kingdom

Please write your trading account number on the reverse. Due to money laundering regulations, the cheque must be in the account holder’s name or it will not be credited accordingly. We will not credit your account until your cheque has cleared.

You may remit your funds in US Dollars, Sterling or Euros.

All retail clients' funds will be treated as client money and accordingly will be held in a segregated client money trust account, unless you opt out of this protection. No interest will be earned on these funds.

You need to download a copy of the Withdrawal Form and either email or fax this to our client funds processing team at +44 (0) 1923 845308.

Alternatively, you can post the completed form to:

• Client Funding
• Spread Co Limited
• 1st Floor North, Argyle House,
• Joel Street
• Northwood Hills
• Middlesex
• HA6 1LN
• United Kingdom

For fastest processing, please send us the withdrawal form by fax or email. Once we have ensured that you have sufficient funds in your account, we will process the withdrawal and remit the funds to the bank account you have registered with us. All withdrawal forms must reach Spread Co by 12:30pm London Time in order to be processed on the same day, otherwise they will be processed on the following business day.

Funds can only be remitted to the bank account that is stipulated on your account application form. The bank account details on the withdrawal form must match the ones originally specified on the account application form.

All bank charges for deposits and withdrawals will be paid by you.

Funds cannot be withdrawn from your account immediately after it is closed. Firstly a final statement will be prepared at the end of the trading day. All closed P&L will be included in the cash balance to calculate the final cash balance and then the withdrawal/payment will be prepared.

Saturn TRADER is Spread Co's in-house trading platform which has been designed in two different formats. One is a web-based version and the other is a downloadable version.

In terms of functionality, there is little difference. You can place orders/trades and see market prices on both platforms. The look and feel of both the web-based version and the downloadable version of the platform is designed to be very similar. The web-based version of the platform is designed for our clients who travel frequently. You can log-in to place trades from anywhere in the world as long as you can access a PC or laptop. The web version can be accessed from any PC or Macintosh computer running a web browser that supports the flash player 9.

Yes. If you place a trade or order in the web-based version of the platform, you will be able to see that trade or order if you log into the downloadable version of the platform. You will be able to see all the trade activities that were performed on one version of the platform in the other version as well.

No you cannot log in to both the web based platform and the downloadable version of the platform at the same time. If you attempt to log in to the downloadable version of the platform while you are logged in to the web based version, you will be logged out of the web based version of the platform immediately.

You can download Saturn TRADER from our educational CD or from our website http://www.spreadco.com/support.aspx.

Go to http://www.spreadco.com and in the top right hand corner of the website, enter the username and password provided to you. The web based version of the trading platform will be launched.

To get help on our trading platform, please go to:

http://www.spreadco.com/support.aspx. Alternatively please go to http://www.spreadco.com/TradingTools/user_guides.aspx to see the User Guides on the platform. If you have any further questions, please feel free to call us on +44 (0) 1923 832682 or email us here.

You do not have to pay to use the trading platform. It is given to you free of charge if you have an account with us.

We have a wide range of markets which include indices, equities, commodities, bullion and foreign exchange products available on our trading platform.

Yes there are charts in the trading platform and they are available for account holders to use free of charge.

No, you do not need a computer in order to trade. Spread Co has a dedicated 24 hour dealing desk. You can also call our dealers, who will be able to place trades for you over the telephone on your instructions.

First, please check your system meets the minimum system requirements and that your computer can access other web pages on port 80 (HTTP) and 443 (HTTPS). If you are still having difficulties, please call our Helpdesk at +44 (0) 1923 832682.

Windows 98, Pentium III, 256MB Ram, 100Mb free Hard Disk Space, Microsoft .NET version 2 framework and Internet Connection. A broadband connection is highly recommended as the system will be faster. Your screen resolution should be set to the highest possible setting, depending on your screen size.

The system is compatible with any web browser so long as you have Adobe Flash version 9 installed.

Please click here to find out which version of Adobe Flash is installed on your computer.

Please click here to download the latest Adobe Flash player.

The Windows download client will not support Mac OS or Linux. However Flash Player 9 is available for both operating systems which will run the online version of Saturn TRADER™.

For more information please see: http://www.adobe.com/products/flashplayer/.

No. All your account history is securely stored on our server allowing you to log in from any location without losing any information. If you want to have the downloadable version of the platform on your new computer, you will need to download this again though.

Yes, in order to install the trading platform and flash player, you will require local administrative rights on your computer.

No, it is not necessary to disable/allow the pop-up blocker for trading. The software opens in a new browser. However, to access statements or reports on your account through the web based version of the trading platform, you will need to allow pop-ups from our trading websites.

Google tool bar: To allow pop-ups, please log on to the Spread Co website and click the Pop-up Blocker button. The button text will change to read 'Pop-ups OK’, indicating that the Pop-up Blocker has been disabled on that site. Further details are available at: http://www.google.com/support/toolbar/bin/answer.py?answer=9160&topic=11761.

Yahoo tool bar: 1. Click the Pop-Up Blocker menu. 2. Select "Always Allow Pop-Ups From". 3. Select the trading site from the "Sources of Recently Blocked Pop-Ups" list. 4. Click "Allow". Further details are available at: http://help.yahoo.com/l/us/yahoo/toolbar/features/pop-upblocker/basic/pub-07.html. You may also select 'Tools' from your internet browser, then select 'Pop-up blocker' and select 'Turn off pop-up blocker'.

The installation process should take no longer than 5 minutes, depending on your internet connection and PC specifications.

Once the trading platform starts to load, it will automatically check for updates and install any which are required. Once the web based version of the trading platform starts to load, it will automatically install any updates for the platform to start. On occasions third party software may be required, at which time you will be prompted to follow the on-screen instructions.

No, you should never disable firewalls. Most up to date security applications will prompt you with what to do when the trading platform attempts to access the internet and you should always allow access.

Providing your proxy allows connections to the Internet over ports 80 (HTTP) and 443 (HTTPS), you should have no problems accessing the trading platform.

The trading platform operates in a completely secure environment. We employ 128 bit SSL encryption, which is the most secure encryption available today.

Daily statements are sent to you by email every day. Monthly statements are sent to you by email at the end of each month. You can also retrieve copies of daily and monthly statements from the trading platform at any time.

If you did not receive a statement, please call us on +44 (0) 1923 832682 or email us here. Alternatively, you can always retrieve a copy of the statement by logging in to the trading platform.

You will be able to see your executed trades, open trades, account summary and valuation.

To retrieve a copy of the daily or monthly statement user guide, please go to User Guides and Demos. Alternatively, please call us on +44 (0) 1923 832682 or email us here.

The end of day process starts at 10pm (London Time). Transactions that were executed before this time will be reflected in the statement sent to you on the next business day. Any trades that are executed after 10pm (London Time) on any day will be reflected in the statement sent to you 2 business days later.

If you do not think that the information shown in a statement is correct, please contact us within 2 days of the statement date by calling +44 (0) 1923 832609 or emailing us here. If you do not contact us within 2 days of the statement date, you will be deemed to have accepted the transactions(s) listed in the statement.

To see a copy of the daily or monthly statement user guide, please go to User Guides and Demos. Alternatively, please call us on +44 (0) 1923 832682 or email us here.

Yes, Spread Co is regulated by the UK Financial Services Authority. Please see http://www.fsa.gov.uk/register/firmBasicDetails.do?sid=166179 for details of the firm’s registration.

The Financial Services Authority ("FSA") is the single regulatory body for the UK financial services industry. To find out more about the FSA, please go to http://www.fsa.gov.uk/

If you are a retail client, your money will be treated as client money in compliance with the FSA Rules. This means that your trading funds will be segregated from Spread Co’s money and will not be used by Spread Co in the course of its own business. The funds are held in a segregated client money trust account at an approved bank in the EEA.

An order is placed above or below the current market price. The order will only be filled (done) when the market price trades to the order price. A trade is filled (done) immediately based on current market sell and buy prices.

Both limit and stop orders can be placed above or below the market and they can be used to open or close trades. The key difference is that limit orders are filled at the requested price while stop orders may be filled at the requested price or worse. A guaranteed stop order is guaranteed to be filled at the requested guaranteed stop order price.

A guaranteed stop order can either be placed by you on selected trades when you are a Standard Account holder or will automatically be placed on all your trades if you are a Limited Risk Account holder. Where a guaranteed stop order is placed, your losses for a trade will be limited to the guaranteed stop level. You are given the option to choose your preferred guaranteed stop order level, within certain limits.

Note that you are charged a premium to cover the added risk to Spread Co for having to guarantee the price of your stop order if it is triggered. The premium for the guaranteed stop order is adjusted into the trade price. If you open a long position (buy), the premium will be added to your trade price. If you open a short position (sell), the premium will be subtracted from your trade price.

If you place a long trade, your guaranteed stop order will be a sell order below your opening trade price. If you place a short trade, your guaranteed stop order will be a buy order above your opening trade price.

A contingent order, also known as an ‘if done’ order, consists of a primary order, a stop and a limit profit order. You first need to place a primary order, which can be a stop or limit order. A primary order is used to open a trade. After placing the primary order, you can place another stop and limit profit order which will be linked to this unexecuted primary order. If this primary order is executed, both the stop and the limit profit order will be made active. If either the stop or limit profit order is executed, the trade will be closed and any other orders linked to the original trade cancelled.

If you have a Limited Risk Account, a guaranteed stop order will be created automatically when you open a trade. Hence, a contingent order will only consist of a primary order and a limit profit order.

Contingent (if done), stop and limit profit orders are available on our trading platform. If you have a Limited Risk Account, a guaranteed stop order will be created once you open a trade. A guaranteed stop order is compulsory on this type of account.

A primary order is an order placed with the intention of opening a new trade. It is placed above or below the current market price. When the market moves to the order price, the order will be executed and turned into an open trade.

A linked order is an order that is linked to an existing open trade. If you have an open buy (long) trade, you can place an order to (short) sell above or below the market to close off the trade. When the market price trades to the order price, the linked sell order will be executed, closing off the open trade.

An order to sell above the trade price is called a limit order. A limit order allows you to collect profits if the price moves in your favour. An order to sell below the trade price is called a stop order. A stop order is a tool you can use to limit your losses at a level that is comfortable to you.

No, it is not necessary to place a stop or limit profit order. You can choose to place a stop or limit profit order only after the primary order is executed.

If you are a Limited Risk Account holder, you can only create a limit profit order after you have created a primary order, as a guaranteed stop order will be automatically created when you open a trade.

If the market sell (bid) price trades to the price of a sell order or lower, a sell order will be executed. If the market buy (offer) price trades to the price of a buy order or higher, a buy order will be executed.

A sell stop order is executed at either the stop price or lower and a buy stop order is executed at either the stop price or higher. Limit profit orders are executed at the price that is stated by you. Guaranteed stop orders are executed at the exact requested prices.

Stop orders are filled at your stop order prices or market prices. If you had initially placed a stop order to sell 10,000 GBP/USD at 1.9755 and the market traded through to 1.9753/56, your stop order would be filled at the best market sell (bid) price which is 1.9753. Guaranteed stop orders are executed at the exact requested prices.

No. Your order is either filled entirely (done) or rejected.

No, you cannot amend or cancel an order if it is already executed.

Yes, you can amend or cancel a contingent order if the market price has not reached the order price.

You may close your trade by submitting an opposite trade of the same instrument for trades which do not have attached guaranteed stop orders. Trades with attached guaranteed stop orders must be specifically closed by you.

Yes. You can buy and sell within the same day.

The purpose of an order placing distance is to prevent your orders being triggered while you are in the middle of placing them. This can happen especially when markets move quickly. In order to prevent this from happening, we input an order placing distance so as to allow you to safely place your order at least a few pips away from the market.

"Good till cancelled" (GTC) denotes that as long as the market price does not reach the order price, your order will continue to be active until you decide to cancel it.

"Good till end of day" denotes that as long as the market price does not reach the order price, your order will continue to be active until the market closes.

"Good till date/time" denotes that as long as the market price does not reach the order price, your order will continue to be active until the date and time that has been specified by you.

You can retrieve your trade and order history by logging into the trading platform.

It is the difference between your order price and the current market mid price. This is an indication of how far your order price is away from the market.

A derivative product derives its value/price from its underlying asset. The underlying asset can be a share, an index, a currency pair, commodity or indeed any other asset.

The spread, also known as "the dealing spread" or "the buy / sell spread", is the difference between the prices at which you can buy and sell the financial instrument in which you want to trade.

For example:

If Spread Co is quoting the UK100 at 6001/6003, the lower figure (6001) is the sell price and the higher figure (6003) is the buy price. This means that you can sell the UK100 at 6001 and buy at 6003*. The spread in this example is 2 pips.

*Subject to quantity limits set according to current market depth and other conditions.

The spread is how market makers such as Spread Co are compensated for creating a market for you to Spread Trade. A wide or large spread is more expensive to you. A narrow or small spread is cheaper to you.

The size of the spread represents how much the market must move in your favour before you begin to make a trading profit. You buy at one end of the spread and sell at the other end of the spread. If the spread moves far enough in your favour, you will begin to make a profit. If it doesn’t, you will incur a loss.

Spread sizes vary by instrument depending on:

• the liquidity of the underlying financial instrument
• the volatility of the underlying financial instrument
• the amount of freely traded shares that exist for the relevant underlying financial instrument, (for equities trading)

A long trade is when you buy a financial instrument at one price with the aim to sell it later at a higher price. A short trade is one in which you sell a financial instrument with the aim to buy it back later at a lower price.

An open trade is one when you have executed a trade to buy or sell and have an exposure in the underlying instrument. You may have a few open trades at any given time. Your open trade can be a long (buy) trade or a short (sell) trade. An open trade will fluctuate in value as the price of the financial instrument moves. Your profit and losses are unrealised

Intraday trades are trades that are opened and closed within the 24 hour period. This 24 hour period starts every day after the end of day process at 10pm (London Time). Overnight trades are trades which are still open after the end of day process at 10pm (London Time).

Spread Co will automatically roll over open trades on a daily basis. FX trades are charged or credited FX swaps. Adjustments are made to the trade prices.

Spread Co is the counterparty to all transactions

Most stock exchanges operate on a matched bargain or order driven basis. When a buyer's buy meets a seller's sell or vice versa, the stock exchange's matching system will decide that a deal has been executed. In an Exchange traded environment, orders are often filled partially due to insufficient quantity availability.

In OTC trading, there is no centralised physical location. A market maker who is a firm or bank will quote both a buy and a sell price in financial instruments. A market maker is the counterparty to the trades of all the clients. Hence, the client's loss is the market-maker firm's profit and vice versa. In an OTC environment, orders are filled fully when the order price becomes the market price, irrespective of the quantity.

Spread Trading is very similar to trading shares, but there are a range of additional benefits. For example, unlike share trading, there is no stamp duty payable in the UK when you Spread Trade on equity transactions.

Spread Trading is traded on a margin basis. To gain a similar exposure to that which you would get in the equity market, you need to put down only a percentage of the contract value.

For example, if you wish to buy Microsoft Shares at $100 per point and the market price is currently at 24.95/25, you will only need to put down a percentage of the contact value which is (Trade price x stake x NTR) = 25 x $100) x 10% = $250. In contrast, if you were to buy 100 exchange traded Microsoft Shares@ $25, you would have to pay up the full contract value which is (100 x 25) = $2,500.

Since you Spread Trade on margin, your capital can therefore be spread more effectively over a wider portfolio. With leverage, you can make (or lose) the same amount of profit (or loss) with the use of a smaller amount of money.

With Spread Trading, you can sell individual shares easily. To sell individual shares in the traditional stock market, you will typically need to ‘borrow’ shares from a current shareholder, usually a bank, agreeing to return them at some future date. To short sell through Spread Trading, you do not need to actually own the physical instrument. You can hold a sell trade of a particular share for a number of months or years (this is provided that the trade does not get liquidated in the interim).

Shareholders are entitled to corporate action like dividends, rights or bonus issue that are paid or issued by a company. If you hold trades in individual shares, you are also entitled to these corporate actions but you are not entitled to vote.

You can call us on the following numbers:

Trading enquiries : +44 (0) 1923 832 609 (Sunday 10pm - Friday 10pm)

Account Opening: + 44 (0) 1923 832 682 (Monday to Friday, 8.30am to 5.30pm)

General Enquiries: + 44 (0) 1923 832 682 (Monday to Friday, 8.30am to 5.30pm)

Funding / withdrawing enquiries: +44 (0) 1923 832 682 (Monday to Friday, 8.30am to 5.30pm)

Alternatively you can email us here