Mid-Term Spread Bet Trader Profile - How Mid-Term Traders Make Money
The short term doesn't suit everyone, and many traders prefer to cast their minds and their trading projections over a slightly longer-term field, to take advantage of wider trends without tying up their capital for an eternity. The medium term in spread betting can prove fertile ground for a range of trading and investment opportunities, and in the eyes of some traders represents the optimum mix between lower profit, lower risk short term trading and its polar opposite at the other end of the spectrum.
How They Trade
Those trading for the medium term tend to look at opportunities over the course of a couple of days, ranging up to monthly and even in some cases quarterly bets. Medium-term territory tends to be most readily exploited in situations where traders are looking to generate larger profits from each transaction but without tying up capital or exposure for the longer term. This in practice means trades are taken on the basis of the longer term, with a view to cutting short early in order to keep on top of any market risk without dampening profit potential too significantly.
What They Trade
For traders casting an eye to the financial spread betting markets for the medium term, monthly and quarterly bets tend to offer the most suitable transactional timeframes for speculation. This translates commonly into monthly futures bets and quarterly futures bets, depending on the exact nature of the strategy being deployed. As these types of bets do not attract overnight financing, they are a more efficient structure for traders with a defined market outlook to adhere to and utilise, providing opportunities for traders across a variety of different short-term trading strategies. As an alternative to daily bets, monthly and quarterly futures bets have much wider spreads, but this is offset by the lack of financing costs to give a cost-efficient, leveraged means of accessing medium-term markets.
Advantages of Mid-Term Trading
Trading over the medium term means essentially a halfway point between short and long term trading outlooks, bringing the best of both worlds in terms of advantages. Over the medium term, positions can develop to a certain level and can take account of more fundamental shifts in market trends. At the same time, the medium term remains largely isolated from the extended market risk arising from held positions, and capital can be cycled over more opportunities through the same time period as over the course of longer-term trades. These are key advantages for traders looking towards medium term opportunities, and when combined with an effective research strategy can make it a profitable way to trade.
Disadvantages of Mid-Term Trading
Trading over a longer period of time than short-term trades is essentially a disadvantage on the market risk front, posing a further threat to capital than in short term positions. At the same time, this market risk isn't quite entirely offset by the potential for larger returns, and as such mid-term trading strategies often fall awkwardly between these two extremes.