How can I manage my risk when trading?

Choose your trades’ exit points

Manage unfavourable market movements by using stop-losses and guaranteed stops¹

Execute trades at favourable levels

Set limit orders to automatically buy or sell when the market level is more favourable

Use our online learning portal

Become better at combating risk by using free educational materials

Stay on top of market movements

Set alerts and we’ll notify you when a market reaches your specified level

Know your profit and loss

Get a balance snapshot on our platform to easily view your gains and losses

Get negative balance protection

Never go below zero with FCA-regulated negative balance protection²

What is meant by ‘risk’ in trading?

In trading, ‘risk’ refers to the possibility of your choices not resulting in the outcome that you expected. Trading risk comes in a range of forms. The most prominent risks you’ll face when trading spread bets and CFDs are:

Market risk: the general risk that your trades might not perform as you thought it would, due to unfavourable price movements. The market can be affected by a range of external factors like recessions, political unrest, etc.
Impact of leverage: trading on leverage – ie using margin – amplifies profits and losses, as your risk isn’t limited to your initial outlay. Your gains and losses will be based on the full trade value, and you could lose more than your deposit
Lack of knowledge: failure to study the markets and doing thorough analysis can be detrimental. You should learn as much as you can about trading and the asset you’re looking to buy or sell before opening any positions
Emotional trading: it’s not always easy to control your emotions when trading. Impulsivity, fear and greed – to name a few – can take over, and you might end up making poor trading decisions

What are the risks of trading?

There are various risks involved in trading, and different reasons to why they might happen. The most important thing to remember is that you should take steps to mitigate these risks.

The risk	Why it happens	Ways we help
Losing more than your deposit on a trade	Spread bets and CFDs are leveraged, so you only need to put up a fraction of your position’s value to open it but your profit or loss could be much more than your initial deposit	You can set an automatic stop or limit, to define the level you’d like your trade executed at
Having your positions closed unexpectedly	You need a certain amount of money in your account to keep your trades open. This is called margin, and if your account balance doesn’t cover our margin requirements, we may close your positions	Keep an eye on your always-visible running balances in our platform or app, and add more funds if they’re needed
Losing more than the money in your account	Sometimes your positions may be closed out automatically, leaving you with a negative account balance	UK regulation safeguards you with negative balance protection, and we bring negative accounts back to zero at no cost to you.¹
Sudden or larger-than-expected losses	Markets can be volatile, moving very quickly and unexpectedly in reaction to announcements, events or trader behaviour. This could have significant bearing on your open positions	As well as setting stops, you can also be notified of significant movement by setting a price or distance alert, giving you the choice of whether or not to react
Having an order filled at a different level to the one you requested	When a market moves a long way in an instant – or ‘gaps’ – any orders you have placed may be filled at a worse (or better) level than the one you requested. This is called slippage	Use guaranteed stops for protection against slippage on orders to close. They’re free to place, with a small premium payable only if your stop is triggered