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What is a spread betting demo account?

What is a spread betting demo account?
Asked by
Benjamin Schmitz categorie-icon time-icon5 months ago
1 Answer Answer Question

Justin Freeman
Answered time-icon5 months ago

A spread betting Demo account is a free to use account that holds virtual funds and allows virtual trades to be placed. They are supplied by the bigger spread betting brokers so that traders can try spread betting and become familiar with the proposition. They allow account holders to test, practice and indeed, make errors in an environment where losses are a good indicator of success but not actually real.

Spread betting demo accounts at the reputable brokers are free of charge and take minutes, if not seconds to set up. You might want to check the small print to see if they are only available for a limited length of time. This shouldn’t be an issue and a lot of people move quickly on to trading real capital but if you have some particular notes or strategies running on a Demo account you may want to know you can keep the data.

The mechanics of the Demo work on the basis that you don’t actually hold the underlying asset, but instead take a view on whether the price of it will increase or decrease. The platform will have the same general feel as if you were trading real capital. In a Demo account you can trade, take positions and trade out of them. There will be daily reports on profits, losses and account administration, even emailed to you overnight as it would be in a full account. The markets available will reflect what is available on the full account. IG for example offer in excess of 10,000 markets on their spread bet Demo account and you can choose to trade markets that include: equities, forex, indices and commodities.

There may be a few minor features (such as research notes) that are only available to fully registered account holders on the ‘Live’ site. This can be because the broker needs to comply with a certain piece of regulation. This is unlikely to diminish your experience.

Demo sites are a great resource. Setting yourself up with one takes moments and offers a chance to view what it would be like to really trade the markets. Even more experienced traders sometimes revert to a Demo account should they be looking to paper-trade a new strategy. It’s even worth considering setting up a few Demo accounts with different brokers, such as, IG, City Index or ETX Capital. Sampling a few Demo account will allow you to benefit from seeing what each of the platforms has to offer.

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