January 26, 2009
Tradefair is a relatively new service that has been developed by the team at Betfair, and it caters specifically for financial traders who wish to trade the markets and predict future price movements. It is targeted mainly towards traders based in the UK, like myself, although I think they accept applications from a small number of other countries as well.
As regards the Tradefair website itself, there are two main services you can use - Hi Lo and Spreads.
Hi Lo is more of a speculator's market rather than a trader's one because it enables you to bet on whether specific markets will be above or below a certain level at the end of a 5 minute or 20 minute period. For instance if the FTSE is trading at exactly 4500 at 12.00 and you want to trade the 5 minute market, you would place a bet on whether the price would be higher or lower than 4500 in 5 minutes time at 12.05.
This is quite an addictive game but it is one more suited to the casual punter rather than the professional trader. The better service offered by Tradefair, in my opinion, is the Spreads facility.
This is basically the more traditional spread betting service which allows you to place bets on whether a financial instrument will rise or fall in the near future. If you are correct and the price moves say 100 points in your favour, then you can close out the trade and you will win 100 x your initial stake. The more correct your prediction is, the more money you will win.
For instance the GBP/USD is currently trading at 1.37635. The spread offered by Tradefair is a very reasonable 3 points and the current quote for the daily market is 1.3762 - 1.3765. So if you think this pair will rise before the end of the day, you would place a bet for say £1 a point at the higher quote which is 1.3765 and you will win £1 x the amount of points that the pair is trading above 1.3765 either when you close the bet or when the bet expires at the end of the day (if you don't choose to roll it over).
This is a great way of trading the markets, particularly if you are in the UK, because thanks to the current tax laws any profits you make are completely tax free, which is a real bonus if you are a professional trader.
Tradefair allows you to trade a variety of markets in this manner. There are markets for FTSE 350 and AIM shares as well as markets for indices, commodities and forex pairs of course, which will probably be of most interest to regular readers of this website.
The spreads are extremely competitive with just a 1 point spread on the FTSE 100 index and a spread of just 2 and 3 points on the EUR/USD and GBP/USD pairs respectively so they are well worth a look if you are interested in spread betting.
Tradefair are currently offering £75 free credit to anyone who opens an account with them so if you want to take them up on this offer, or if you want to find out more information about their service, you can do so by clicking here.