Investing World Today

Spread-betting companies are increasingly looking to smart phone technology to attract potential traders to engage in spread betting. Popular smart phone platforms are the latest target of specialised ‘apps’ – spread betting applications that run on these platforms. According to the 2010 Trading Behaviour Report, at least 70 % of spread betting traders use or intend to use smart phones for trading. These spread betting apps allow users to monitor prices and place orders on the move. Leading Spread betting companies ETX Capital, IG Index, CMC Markets and City Index have made use of this recent technology.

“It is still early days and as yet difficult to determine how successful this strategy will be. But you have to ensure that these mobile platforms are robust. If someone wants to trade intraday and they are not able to open or close a position based on live prices, that could be a killer blow for the customer,” Andrew Mitchell, an analyst at Charles Stanley, told the Financial Times.

Other analysts point out to the fact that while technology might be useful for some traders, it might not be useful for those who do not know the whole process of spread betting. Companies are trying to overcome this shortfall through rigorous advertising campaigns and spread betting webinars.

Technological innovation, however, is leading to a two tier formation in the spread betting industry, with larger companies that can afford to spend on these technologies and smaller companies that lack the resources.

“The spread bet market is very competitive and it is inevitable that smaller players will feel the pinch. There could well be some contraction in the months and years ahead which makes it doubly important to innovate as technology moves on,” Michael Hewson, market analyst at CMC Markets, told the Financial Times.

The spreadbetting industry also currently faces another problem – users keep switching between companies and as many as nine out of ten starters quit spread betting. Managers at top spread betting companies hope the increased accessibility provided by the use of smart phone technology will make them spread bet longer.