Further good news from the City for spread betting platforms – London Capital Group have announced positive second quarter results, showing a year-on-year rise in profits to around £4 million, with an equally strong balance sheet reflecting a solid trading position for the spread betting giant.
Along with several other spread betting companies to announce favourable trading results in recent weeks, London Capital Group have benefited from the increasing profile of spread betting as a viable alternative to straightforward trading.
A note of caution for spread traders, however – the rise in pre-tax profits are accounted for both in terms of organic growth, and in increasingly volatile markets as the UK economy takes its first tentative steps out of recession.
While this means the profit potential from financial spread betting is kicked up a notch, it also leaves traders facing potentially more significant losses if markets move against them – a factor which has evidently proven instrumental for the London Capital Group in their year-to-date profit announcement.
So – with increased volatility clearly a double-edged sword, it pays for traders (particularly the inexperienced) to ensure steps are taken to mitigate risk, including manageable stops and data analysis, to prevent catastrophically wayward positions.