There once was a time in the history of trading that people were simply terrified to start investing. The financial downturn meant that traders and investors took a huge financial blow and elected to drive away out of the market battlefield. It has now been 18 months since a substantial number of investors began drifting away from the market and as the smoke clears, many are starting to come back. As before, a lot of clever investors still rely on spread betting as their desired instrument for taking on the erratic market.

However despite the overrated popularity of spread bets there are other alternatives. For example, covered warrants have plenty of advantages similar to spread betting without the added high risk associated with spreads. Covered warrants are considered geared products just like contracts for difference and spread bets, but unlike the aforementioned tools covered warrants don’t have the major risks when terms of losing more than what was primarily invested. The most investors can risk ending up losing is covered warrant of their original investment.

Another benefit from covered warrants is that when you take hold of it you have yourself a self-invested pension plan (SIPP) but without the spread bets. Covered warrants are dubbed on the London Stock Exchange and can be traded through your local broker. Moreover, they provide all the benefits of a listing of a closely monitored exchange which all epitomise liquidity, transparency and regulatory framework as well.

Transparency is offered by the centralised listing and the regulatory support guarantees that the issuer can provide liquidity during the entire time frame of the covered warrant. This basically means that throughout the trading day you are always ensured an obtainable price and therefore be able to deal with covered warrants. Finally, financial investors should always be reminded that spread betting is not the only desirable variable tool in the commodity market. There are in fact other ways to be in the game.