Volatility Market

During this period of financial uncertainty and volatility, it is more important than ever that you take the necessary precautions when spread betting.

With some markets moving as much as 777 points in a day, it is essential you protect yourself from any sudden movements. Remember: spread betting is a leveraged product and can result in losses that exceed your initial deposit.

IG Index offers a wide selection of risk management tools including non-guaranteed, Guaranteed and Trailing Stops. Our non-guaranteed Stops come at no extra charge and help reduce your deposit and limit the amount you can lose should the market move against you. They will not, however, protect you from 'slippage' - when the market gaps suddenly and passes through your Stop level. In this situation, rather than closing at your Stop, your position would be closed at the best available price after the gap.

Protect against slippage

To protect against slippage, you should place a Controlled Risk bet. Though you pay a small premium in the opening spread, usually two pips, this feature gives you absolute protection against the market gapping against you. Should the market move against you suddenly, we guarantee your position will be closed at the level you placed your Controlled Risk Stop.

Other ways to limit your risk

In addition to a full range of guaranteed and non-guaranteed Stop and Limit Orders, we also offer Trailing Stops. These are effectively Stops that will move automatically as the market moves in your favour, locking in profit along the way and putting an end to market-watching and manual Stop movements. However, please note that Trailing Stops are not guaranteed, and like standard Stops, can be affected by slippage. To protect against slippage when spread betting, place Controlled Risk bets.

For more information on spread betting safely, please see our Risk Management page. We have also launched a new online seminar where you can find out more about risk management using stop orders.

Remember that spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.

Updated: 30/09/08