Capital Spreads, one of the leading spread betting companies, has just launched a new type of account with limited risk in order to protect more inexperienced traders and those looking for a safety net.

The new account is denominated as Limited Risk Account and as the name suggests it has the risk limited to the client’s funds. Every time the client places a trade, a guaranteed stop order is attached such that the maximum risk incurred is known beforehand and there is no possible slippage because Capital Spreads protects the client for that risk. The downside is that the feature has a price attached. Basically the client will have to pay higher spreads than it would pay with a regular account. The charges start at £1 for indices and 0.5% for equities.

The guaranteed stop order attached in the limited risk account introduces some additional limitations. The distance between the stop order level and the entry level is higher and in some cases may be more than desired and it can’t be amended outside the provider’s market hours.

The limited risk account is a type of spread betting account already launched by some other providers in order to give clients the possibility of being fully protected. Nevertheless, a regular account has guaranteed stops available. A client can still opt for a regular account and pay the price for a guaranteed stop order only when he needs that feature and use regular stops otherwise, saving the extra cost.