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Trading Questions

Being a relatively new form of trading, there are always many questions, from both new and experienced traders, so I have listed some of the more common ones along with the answers. Naturally if you do have other questions, which I’m sure you will, please just click on the Ask Anna link alongside which will take you to another site where you can ask me trading questions, view questions asked by other traders, and also log in to comment on their questions and also my answers. I hope you find the site useful and I will always respond to your questions, but please remember I do trade during the day and in the evenings, so it does take me a few days to respond, particularly when the markets are lively!

  • What are the advantages of fixed odds trading?
  • Fixed odds trading provides you with a limited risk method to trade markets with are trending up, down and sideways for a wide range of markets and instruments. Your risk is always limited to your stake at all times yet high leverage is still possible using a fixed amount which always remains the same throughout the life of the contract.
  • Who are you trading against?
  • You will be trading against the bookmaker who sets the odds for each bet.
  • How does the broker make a profit
  • The broker will include a small commission built into each bet. This will vary from market to market and is also dependant on market conditions. When you request a trade, you will always have the option to refuse the bet if you feel it is not advantageous for you.
  • Are profits tax free?
  • Yes in the UK at present as these trades are classified as betting, and not trading, but please take professional advice if you are unsure in your own country.
  • When you open a bet over several days, what constitutes a day?
  • All bets are priced using calendar days, not business days, and this is factored into the bet price quoted to you. So a 10 day bet opened on a Monday morning would expire on the Thursday morning of the next week.
  • How are the prices quoted calculated ?
  • A variety of methodsĀ  are used to compute bet prices. Some bets are priced using complex mathematical algorithms, based on option pricing technology whilst others are priced using simpler methods. Advanced pricing models take into account market implied volatility, the current market quote of the underlying market, expiry date, present market conditions and other contributing factors. Prices are weighted according to demand so that betsĀ  in high demand will be priced at a premium to bets in low demand.
  • Can I close a bet out early?
  • Yes you can, either to mitigate any further loss, or to take a profit early. So even with a limited risk, you can reduce this risk further is a loss is occurring, by closing out before expiry.