The average client lifetime for a spread betting company seems to be just 6 months. By these standards I am positively ancient…

I don’t know that you’re losing at spread betting, of course, but it’s a fact that most spread bettors do lose money. If you are one of them then you need to avoid some of the psychological traps we will highlight in this feature.

Considering what I’m going to write about today, I couldn’t help going for the pun Reaching for the Skye!, because it’s all about Skyepharma.

Binary options are quite simply a form of option that offers one of two outcomes and hence the name ‘binary’ which typically describes an outcome of either 0 or 1.

Position trading is not the only approach, and I have also talked previously about swing trading. You might have already deduced it, but the one significant omission in my coverage has been day trading.

Think back to when you were a child. You blew a bubble, it grew and eventually it burst. That’s how some of my former colleagues in Hong Kong are feeling about China’s prospects at the moment – something I experienced first hand last week.

I’ve been thinking about how feasible it would be to play a game of ‘bigger and better’ with spread bets. This would be quite the opposite of the highly diversified long-term position trading approach that I’m practising in my trading tail.

I was first attracted to binary betting due to its tax-free status (like spread betting, it’s classed as gambling rather than investing) but I wasn’t so keen on the fact that fixed-odds binary bets work rather like traditional financial options. In any case I’ve been dabbling in them.

I have no problem with the key idea of holding onto a financial instrument for as long as possible while a trend develops, in order to run the profit. What I do have a problem with is waiting for a trend to develop before taking the position in the first place.

This morning I received a series of order executed emails relating to Cable and Wireless Worldwide, and a quick check of my trade history (see below) revealed that I had almost-simultaneously bought and sold the same stock.