Choosing a Spread Betting Broker is much more difficult these days due to the amount of competition out there. However, if we break down and prioritise our criteria it makes life a little easier.

We have constructed a Top 10 list and tried to prioritised this into what we believe are the most important aspects when looking to choose a Spread Betting Broker. Of course this list is arguable and rightly so, we welcome others views into what they consider the most important aspects. Feel free to comment, your input will be most welcome.

This is quite a lengthy article, but not on purpose. It just grew and grew as we wrote it, reviewed it, amended and added to it. We hope you find it of interest.

1. Regulation

For us this is the most important factor and priority number 1 when selecting a Spread Betting Broker. If the broker is not regulated, you may end up in all sorts of trouble. The broker could go bust, it could refuse to respond to withdrawal requests or it could just plain disappear. It is most rare these days that a Spread Betting Broker will not be regulated, in fact we do not know of one that isn't. If using one of the main stream brokers this is less of an issue but if ever you go off the beaten track or respond to some new advert in your inbox always, always, ensure the broker is regulated. We like to see "Authorised and regulated by the Financial Services Authority", as a minimum.

The priority here is the same as with any institution you place your funds with, you want to make sure they are protected and as safe as possible.

2. Reliability

We all rely on the internet now and accept it as being reliable (well, most of the time). We also take it as a given that any service we wish to access on the internet will be available 24x7, we now expect to be able to pay our bills any time of the day or night we choose. Most Spread Betting Brokers these days claim 24x7 up time, Monday to Friday as a minimum.

How we gauge this reliability is not particularly easy. True measurement only comes through personal exposure and usage. Two things we can do here, firstly, we can ensure we use a reputable broker, one that is well known, they will generally only be well known if they have proven to be reliable across a large customer base. Secondly, we can search the internet. People in general are quick to complain and share their thoughts when a service is not as it should be, even more so than if it is. Yes, these views (from forums, etc.) should not be the basis of any final decision but they can provide some guidance in conjunction with our own personal experiences.

Recently, reliability has become almost a non-issue with the majority of internet based services and this is also true of Spread Betting Brokers, as long as you don't tread off the beaten path.

However, no matter how reputable and reliable your primary Spread betting Broker is, you should always ensure you have a back-up broker which also meets your requirements.

3. Markets/Availability

We generally only trade the highly liquid and widely offered Forex and Index markets. For this reason we do not have to worry too much about the instruments the Spread Betting Broker offers. We can be quite confident the instruments we wish to trade will be supported, if not it will be quite a poor broker and so can be avoided.

This will though be an important subject for some traders who trade more exotic instruments so some ground work will be required at this stage to ensure they can trade the markets they are interested in. If the markets you wish to trade are not on offer, choosing that broker makes no sense at all.

Availability is a more important issue for us and it will be just as important to everyone else too. As well as the markets we wish to trade being offered they also have to be available at the times we wish to trade them. This does not just mean times we wish to place orders it also means the instrument has to be available at times when we may wish to exit a position or when we might expect a Target/Stop to be honored. So, for us, as we often will hold Forex positions overnight with a Stop and Target in place it is pointless us having a broker that only offers the Forex market from 06:00 to 22:00. We need a broker that facilitates 24 hour execution.

Don’t just check that the Spread Betting Broker supports the markets you wish to trade, also ensure those markets facilitate execution at the times you need them to active.

4. Interface

What's important here for us is:
• Easy location of the instruments we trade regularly, in the form of a "My Portfolio" or "Watchlist", a common feature with most brokers.
• Easy Order/Trade entry with the ability to enter Stop and Target at the same time.
• Efficient Trade management - By this we mean we want to be able to easily view, monitor and manage open positions.

It is essential to us that we can easily find the instruments we wish to trade and set up orders/execute a trade (with Stops and Targets defined (we never trade without them)). Secondly, we need to be able to monitor and amend those open positions, gauge our exposure, move Stops, etc. without constant screen watching or feeling nervous when we are not at the screen.

5. Execution

Efficient execution is key. It is one thing to stick to your trading plan, get your orders/trades in and have sound discipline, Money and Trade management. But, there is nothing more frustrating than a Spread Betting Broker that does not fill those orders efficiently. By this, we mean at the price specified and within seconds of that event occurring. Yes, slippage is an accepted overhead of trading but it is not one that should be common. We would expect less than 10% of our trades to incur some form of slippage, any more than this and we would be reconsidering our choice of broker.

6. Spread

Yes, this may surprise, it's number six in the list. But, let's put this into some form of perspective. If we are offered a 3 pip spread with one Spread Betting Broker and 6 pips with another for the same instrument, of course we will not consider the one offering 6 pips. We will first look into the broker offering the 3 pip spread and if it is not suitable we will look for other brokers that are closer to the 3 pip mark. The reason spread is so far down our list is that these days it is less important. There is so much competition out there that spreads are now quite uniform, especially for the highly liquid instruments that we trade. So, if we find one broker is offering a 2 pip spread for a specific instrument we would expect to find another half a dozen or so offering the same, or similar spread.

So, we want a Spread Betting Broker that is regulated (our funds are safe and protected). We want one that is reliable and available for us 24x7, supports the markets we want (at the times we want to trade) and one that has a slick interface with good functionality. Assuming execution meets our requirements then we will happily give up a small difference in spread in favor of, what we consider, more important elements.

What would you rather have? A Spread Betting Broker whose service was only available 4 mornings a week and who slipped a pip almost every other trade. Or, maybe, one that was available 24x7 with an easy to use platform, instant execution 95% of the time for an extra pip spread? We feel justified in our priorities.

Note: Commissions and/or fees (other than the spread) with Spread Betting Brokers these days is rare. We see no reason whatsoever why anyone should consider a broker that levies additional charges. If you are using one that does - Why?

7. Support

Although we should be trading with a Spread Betting Broker that is reliable and available as per our requirements things can and do go wrong occasionally. It is important to know that the broker has a sound support infrastructure. Again, we can check the internet (forums, etc.) for an idea of this but at least once a quarter it should be put to the test.

Always know how to contact your broker, email, phone, online chat, instant messaging, etc. Ensure you know what these details are and have them to hand. We keep them printed in large font on the nearest wall.

Make sure you get personal experience of your brokers support process. As mentioned above, check it on a regular basis, once a quarter should suffice. This not only ensures the details you have are up to date and that your broker is efficient but it also ensures you are aware of what to do in the case of an emergency.

Do not learn this lesson the hard way!

8. Charting Package

Almost every Spread Betting Broker now provides some form of Charting package. The Charting package you need and use will depend on the Trading Systems/Signal services you use. In the case of the latter is it most likely you will not need or use a brokers Charting package at all.

We have found that we mainly rely on IG Index Advanced charts. These charts cover all the instruments we ever trade and we can quickly and easily configure them as and when we need to. We can also, if the task is not too complicated, use the built in "easy language code" to program our own simple indicators. Regardless of the broker we use to trade we will almost always refer to and trade off our IG Index Advanced charts. The exception to this is where we need to use our Meta Trader 4 (MT4) Charting package where the system we are trading is reliant on a MT4 Indicator/Expert advisor.

So, when we consider a Spread Betting Broker the Charting package they provide has no real bearing on our decision making process. We have found that each trader usually finds and uses just one "core" Charting package, this may be a Traditional Brokers, Spread Betting Brokers or proprietary Charting package. So, for this reason we see the Charting package as almost irrelevant when researching a broker. Of course, this will be different for those new to trading still seeking a Charting package of preference. In the end it will be a matter of personal choice.

9. Guaranteed Stops

We have included this at number nine because, although not important to us, it may well be important to some, especially those new to trading.

Firstly we will explain why this is not such an important criteria for us. We typically trade Forex or Indices with brokers who accommodate 24x7 trading Monday to Friday. It is extremely rare we will hold a position when a market we trade is closed, we rarely hold a trading position over a weekend. For this reason it means we only hold a trading position when the instrument we trade is executable and know we will be filled at our Stop/Target or we can exit manually as we wish.

The above is good practice. Of course any market can and will occasionally gap. These events are not so common and are less common when you consider the chance of them happening at or around your Stop, if they happen around your Target it's not so bad!

So, intraday market gaps are just risks we choose to accept rather than paying the price of an increased spread for a guaranteed stop. This is a matter of personal choice based on ones attitude to risk and acceptance of the increased spread associated with guaranteed stops.

Important: If Guaranteed stops are part of your trading plan then ensure you read the Terms & Conditions as they vary from broker to broker.

10. Additional Functionality

Although this is the last on our list, it could well be number one.

Increased competition has meant that most Spread Betting Brokers now offer and satisfy many of the above requirements. They have to or they would not be in business. For those already happy with their broker, when looking around, their main priority is now "value add" or additional functionality.

For us, our preferred Spread Betting Broker, IG Index, provides us with this "value add". They provide:
• A "stepped" trailing Stop loss facility - Ideal when needing to apply a trailing stop that moves x pips behind the current price every time it moves x pips.
• The facility to place market orders close to the current market price.
• And, of course, their Advanced Charting package is our Charting package of choice.

Additional functionality is a "nice to have" and it is number ten on the list simply to make a point that you should never stop looking around, every six months or so, for a Spread Betting Broker that may better suit your needs than your current broker. Most are rolling out new functionality more often than not and some offer reasonable incentives to encourage you to try their new functionality.

Final Words

We hope the above has been useful, we certainly enjoyed putting it together, the process even got us thinking as to why we use the Spread Betting Brokers we do.

As mentioned in the introduction, this list is of course arguable and we welcome others views on this subject. It is only collectively that we can help others with our experience, in particular those that are newer to trading than ourselves. We all know and remember how difficult it was when entering into this arena and we also respect and appreciate that we are still learning and gaining knowledge, even after many years experience.

I think your conclusion that charting package is irrelevant is fundamentally wrong for two reasons.
1) The ability to chart and deal from the chart can be very useful.
2) It is free. you can spend the saving on FX advice.

CMC is a good benchmark for comparison because they are the only spread better I know that grew from an FX origin. They have very good charts. Only issue is that trend form lesser frequency charts don't translate perfectly when you change to most frequency (eg one minute)

Graham Cox
PS Anyone know of a spread better that permits stops to be calculated automatically on a trend line

Interesting thread.

Not that I am ever going to reach the dizzy heights, but was wondering whether anyone has any `real`evidence of people getting thrown out by a broker for winning.

Yes, there are lots of stories, 33rd hand accounts etc etc. But is there any evidence.

I have always believed that the brokers makes it`s money from the spread and bye and large the winners are paid by the losers. Obviously there can`t always be an equal number of both, so if there is more winners than losers for a minute, day, week, month, what happens then? Does it all just even out over time?

I was told recently that with some brokers, when you reach £20pp you hit their radar and your trades get referred to a human being, at least for a while.

I know they have affiliate schemes, which suggests they don`t care if you win or lose. IF for instance I started winning and obviously had a system that worked very well, my broker would know that, if I then said to them I was going to start selling my system and wanted to become an affiliate, what would they say?
If they looked at my account and let`s say saw that over the last 12 months I had gradually turned from a loser into a winner and was now winning daily at £30+pp, would they say they don`t want be bringing another 200+ people on board winning at the same rate, or is that exactly what they do want? I have no idea.

Sorry for the ramblings but this has always intrigued me, most traders have an opinion on this but most seem to come from myth and legend rather than hard fact.

Anyone reached £20pp or more and had an issue?

If not, when I get there, I will let you know

I agree that the right charting apckage is very important. I have not looked around at the Spread Bet companies charting offerings for a few years. The last time I did they were complete garbage for anything but scalping or end-of day.

I used to trade EOD stocks, intraday Indicies, Commodities and Options all via IGIndex. But I only used their charts when I had to. For stocks I still use Sharescope for EOD charting.

These days I rarely trade aything other than FX - still with IGIndex, and if you trade FX there is no comparison between charting packages - get yourself a free demo account with a good MT4 Broker. The charting is better than even quite expensive paid-for offerings and I find that most brokers prices ar very close to those of IGIndex.

There are thousands of free indicators and trading robots available (- Google 'MT4 indicator' ) and you can write your own indicators,money management scripts and trading robots all for free.
It is a pity that the MT4 brokers do not offer more non-FX markets, but I believe that many will after MT5 is introduced.

When I started spread betting about 6 or 7 years ago, only 2 platforms were 24x5.5. They were CMC and IG. I tried CMC first, but got the feeling that they stop hunted on stocks overnight, so I switched to IG and have been with them ever since.

Sorry for the longer than intended post.

Ian

Charting is low on OUR list as we, have found a Charting solution(s) we are happy with as others here seem to have too. Please note the penultimate sentence. Yes a charting package is relevant and important to some but to US, it is not, as we have our established favourite(s). Thanks for your input.

"So, when we consider a Spread Betting Broker the Charting package they provide has no real bearing on our decision making process. We have found that each trader usually finds and uses just one "core" Charting package, this may be a Traditional Brokers, Spread Betting Brokers or proprietary Charting package. So, for this reason we see the Charting package as almost irrelevant when researching a broker. Of course, this will be different for those new to trading still seeking a Charting package of preference. In the end it will be a matter of personal choice."