Trading: what you need to know
Written by Matt Allen - Published 27th July 2026
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KEY TAKEAWAY Trading is buying and selling financial instruments to profit from price movements. With Spreadex you trade via spread betting and CFDs — derivatives that let you speculate on rising or falling prices without owning the underlying asset. This section covers the essentials you should understand before you start, from how leverage works to how to manage the risks. |
If you're new to trading, this section brings together the essentials in one place. Below is a short overview of each topic, with a link to a full guide. Start anywhere, but if you're completely new, the order below is a sensible route.
Trading Basics
What is trading?Trading is the act of buying and selling financial assets — such as shares, indices, currencies and commodities — to profit from price movements. Traders can go long (backing a price to rise) or short (backing it to fall). |
Trading vs investing: what's the difference?Investing means buying and owning an asset in the hope it gains value over time. Trading means speculating on price movements — in either direction — typically over shorter timeframes and without owning the asset. |
What are derivatives?A derivative is a contract whose value comes from an underlying asset, such as a share or index. Spread bets and CFDs are both derivatives: they let you trade on an asset's price without owning it. |
What are leverage and margin?Leverage lets you open a position with a value greater than the deposit — known as margin — required to open it. It magnifies both profits and losses, which is why leveraged products carry a high risk of losing money rapidly. |
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QUICK FACT You don't need to own an asset to trade its price. Spread bets and CFDs are derivatives, meaning your position tracks the market's movement without any shares, currency or commodity changing hands. |
Getting started
How do you get into trading?Getting started means understanding how markets move, which products are available, and — above all — the risks involved. Our beginner's guide walks through each step, including a worked example of a first trade. |
How do you choose a broker and open an account?A UK broker should be FCA-authorised, transparent on costs, and offer proper risk-management tools. Opening an account involves an online application, including an appropriateness assessment completed by every applicant. |
MANAGING RISK
How do you manage trading risk?Managing risk means understanding your exposure and using the tools available — including stop-losses and guaranteed stops — alongside the discipline to stick to a plan. |
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IMPORTANT TO KNOW Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. |
Frequently asked questions
How do I start trading?
Start by learning how trading and leveraged products work, then open an account with an FCA-authorised broker. With Spreadex, that means an online application including an appropriateness assessment, after which you can fund your account and trade. Our beginner's guide covers each step.
Read the full guide: How to get into trading: a beginner's guide →
What can I trade with Spreadex?
Spreadex offers spread betting and CFD trading on thousands of markets, including UK and international shares, major indices, forex pairs and commodities.
Is trading right for beginners?
Trading leveraged products carries a high risk of losing money rapidly and is not suitable for everyone. All accounts are opened as retail accounts, and every applicant completes an appropriateness assessment at onboarding designed to check they understand how these products work.
How much money do I need to start trading?
Only trade with money you can afford to lose. Spreadex has a minimum deposit of just £5 and offers low minimum stake sizes, which means positions can be opened with limited exposure while you build understanding.
