Limit Your Risk
The beginning of 2008 has heralded a period of negativity in the FTSE 100 not seen since September 2001, with the index tumbling by 5.48% to close at 5578.2 on Monday 21 January.
With the Fed slashing interest rates by 0.75% in a bid to see off similar losses on the other side of the Atlantic, it remains to be seen how volatile the market remains over the coming months.
However, for the day trader, potentially volatile patterns represent a golden trading opportunity. Conversely the potential to lose more than you anticipated is a major concern. This is where risk protection can help you take a view without taking on an open-ended liability.
CFD trading with Guaranteed Stops
To protect yourself against dramatic movements you may want to consider opening your position with a Guaranteed Stop. We have low-cost Guaranteed Stops available across our extensive range of markets, usually just 0.3% of the underlying transaction value.
This premium is levied when you open the contract and your position will then be closed automatically should the market breach the level of your Guaranteed Stop. So your maximum possible loss is fixed at the outset, with no limit to your potential profit.
To find out more about trading with Guaranteed Stops please see Risk Management.
The above comments do not constitute an investment advice and IG Markets accepts no responsibility for any use that may be made of them.
25/01/08