Financial Spread Betting Guide to the Stock Market Indices
Spread Betting
Stock Market Spread Betting

Stock Market Spread Betting



Where to Spread Bet on Indices



You can spread bet on Indices with the following companies:

Stock Market Index
Financial Spreads - Stock Market Index GFT - Stock Market Index IG Index - Stock Market Index InterTrader - Stock Market Index City Index - Stock Market Index ETX Capital - Stock Market Index Capital Spreads - Stock Market Index
FTSE 100 daily (spread size) 1 1 1 1 1 1 1
Dow Jones daily (spread size) 2 2 2 2 1 2 2
DAX 30 daily (spread size) 1 1 1 1 1 2 1
Indices (min stake) £1 £1 £1 £1 £0.50 £1 £1
Indices (more available) More Index markets available with Financial Spreads? More Index markets available with GFT? More Index markets available with IG Index? More Index markets available with InterTrader? More Index markets available with City Index? More Index markets available with ETX Capital? More Index markets available with Capital Spreads?
  Index spread betting may also be available with other companies - notes.


Index Spread Betting - Stock Market Review




Index Spread Betting - Stock Market Review

Stock Market Spread Betting

 - 02 September 2014

Stock markets remain jittery this morning, with Europe set to open fairly flat.

With no cues from the US after the Labor Day holiday, European traders have been left to weigh up geopolitical tinder boxes on the one hand and possible ECB gift boxes on the other.

With Russian troops allegedly crossing the border and the Ukrainian Defence Minister claiming that a 'great war' is coming, markets should be tumbling.

However, the perversity of bad news is good if it leads to quantitative easing from the ECB got another boost yesterday following yet more weak economic data in the form of Manufacturing PMIs.

When markets are in this awkward period of stasis, it feels like something big is about to shove them one way or the other.

So if you see Putin going shirtless or Mario Draghi bulk buying paper, that could be a good hint to get positioned either way.

Amid a quiet trading session, with volumes more than 30% lower than last month's average, the UK 100 rose by just 7 points to 6824.

The price action was dominated by a rise for BAE Systems and rumours that ITV is to be the subject of a takeover.

At the other end of the scale, Tesco was under pressure after being in the spotlight lately for 'the lack of strategy'.


Stock Market Spread Betting

 - 01 September 2014

European equities are set to open mixed on conflicting cues.

The run of weak economic data from the continent continued with another dip in inflation, rising unemployment in Italy and a collapse in German retail sales on Friday, adding further pressure on Mario Draghi to do something more.

Despite the August rally petering out over the last few sessions, the bulls are hanging onto hope that this week's ECB meeting will give at least some indication that stimulative relief is on the way.

However, on the flip side is the continued engulfing of Ukraine by 'Russian backed' forces.

With Putin growing increasingly confident that he can act with impunity, the opening of a new front in the conflict near Mariupol should have sent traders reeling.

Instead, traders are slightly relieved that the only thing the West can cobble together is another set of flaccid sanctions, which the Kremlin will surely shrug off.

Ahead of today's Labor Day holiday, US equity trading was rather thin and volumes were well below average.

US economic data had remained strong, with consumer sentiment surpassing expectations, but cautious investors did not want to leave too much on the table ahead of the long weekend.

As a result, the Dow Jones pulled back in the afternoon session, closing 20 points lower at 17,088.


Stock Market Spread Betting

 - 29 August 2014

European equities are set to open mixed as traders struggle to asses the flare up in Ukraine.

There are accusations that the Russian military has been crossing into Ukraine despite rebuttals from the Kremlin about lost paratroopers and vacationing Russian regulars.

Although markets have traded a touch weaker over the last couple of sessions, they aren't reacting as though this is a full territorial invasion.

As long as the media keeps portraying it as an 'incursion' traders may shrug off the situation in Ukraine as a limited, contained conflict.

However, it seems that Russia has persistently and consistently escalated the conflict but with no clear end objective.

Traders will have to mull over how far into Ukraine Russia is intending to incur and if that point is beyond the West/NATO's tolerance.

US stocks initially tumbled on the news that a third front in the fighting between government forces and pro-Russian rebels had opened up.

Later on US retail earnings also disappointed the global markets, accelerating the slump.

However, the GDP data came in better-than-expected, reversing the daily trend towards the close.

So the Dow Jones ended rather flat around 17,114.


Stock Market Spread Betting

 - 28 August 2014

European stocks are set to edge lower as concern brews that traders have gotten ahead of the curve on ECB stimulus and that fighting in Ukraine is flaring up again.

Comments from German Finance Minister Scheuble that Draghi's speech had been misread by the market, and that further action was off the cards bar a disastrous August inflation reading, stirred fears that this was all just another example of Draghi's verbal easing trick.

Investors are fast becoming wise to that one and it won't be so easy to dangle the carrot of 'what ever it takes' in front of markets to jump-start the European economy.

Also keeping recent bullish sentiment in check is the alleged Russian-led offensive in Ukraine.

With reports of tanks, artillery and infantry flooding across the border, the Ukrainian army have been put on the back foot.

Given that Russian para-troopers have been supposedly wandering 20km across the border by accident, some are suggesting that Putin cannot be bothered hiding his intentions anymore.

After reaching all-time highs in the previous session, the Dow Jones stopped for a breather yesterday.

Some investors were quick to take profits off the table, pushing the US index 12 points lower to 17,112.

However, the fact that the intraday pullback was followed by a rally towards the close shows that the bulls remain in control for now.


Stock Market Spread Betting

 - 27 August 2014

European equities are set to open modestly lower as we take a small breather.

However, the bulls remain firmly in control as they believe that Draghi is in their corner warming up the printing presses.

Unlike US markets, the major European indices are still a fair distance from their all-time highs, but with the ECB apparently about to provide the ultimate economic backstop, traders have got something to aim for.

The economic data out of Europe certainly warrants some super stimulus and it has been encouraging for the bulls that Draghi acknowledges the fact, but could they be getting ahead of themselves?

Remember, this is a man that has being saying he will do whatever it takes for just over 2 years.

There's an impression that printed money will be entering the system imminently, but if the ECB has a different timing expectation, or if this turns about to be another 'verbal easing bluff', then we could see stocks turn sour on the whole affair.

Yesterday's massive jump in durable goods orders, which tripled the estimates, sparked a sharp rise in US equities.

Shortly after, consumer confidence data also came in stronger than expected and accelerated the rally.

This saw the Dow Jones continue its advance, reaching a fresh all-time intraday high and closing 50 points higher at 17,122.5.




Spread betting and CFD trading carry a high level of risk and you can lose more than your initial deposit so you should ensure spread betting or CFD trading meet your investment objectives and if necessary seek independent advice.

Market Commentry from Financial Spreads.


Financial Spreads Review
Financial Spreads - tax free* trading on over 2,500 spread betting markets. With a Financial Spreads Account you can trade commission free, 24 hours a day on stock market indices, forex, shares commodities and...read review » Financial Spreads.



Stock Market Spread Betting Analysis



Dow Jones Spread Betting Analysis
02 September 2014 update - The Dow Jones spread betting index was closed due to the market holiday in the US.


S+P 500 Spread Betting Analysis
02 September 2014 update - The S+P 500 spread betting index was closed due to the market holiday in the US.


Nasdaq Spread Betting Analysis
02 September 2014 update - The Nasdaq spread betting index was closed due to the market holiday in the US.


For the last 5 days of stock market technical analysis also see:

Spread betting and CFD trading carry a high level of risk and you can lose more than your initial deposit so you should ensure spread betting or CFD trading meet your investment objectives and if necessary seek independent advice.

Technical Analysis from PipTrade.



Introduction to Indices Spread Betting



The most popular financial spread betting markets are the Stock Market Indices. These indices represent the combined value of some of the largest companies in the world.

The FTSE 100 Index is the basis for the most popular financial spread betting market in the UK. The FTSE 100 includes the likes of energies companies BP and Shell as well as banks such as HSBC and Barclays.

By financial spread betting on the FTSE 100 to go up or down you are speculating on the aggregate movement of all of the stocks listed in the index. A comprehensive understanding of the financial markets is required owing to the variety of sectors that are often represented.

Having said that, Indices can make exciting trading given the nature of the markets. For example, throughout 2010 the large mining companies and financial institutions have heavily influenced the movement the FTSE 100.

‘Defensive’ pharmaceuticals’ shares such as those of GlaxoSmithKline and Reckitt Benckiser have been less volatile and have therefore had less impact on the FTSE 100.

Some of the most traded indices markets include:
  • FTSE 100: a share index that lists the performance of the top 100 UK listed companies. They are ranked by their market capitalisation. This index is also known in financial spread betting as the UK 100

  • Dow Jones: a share index that reflects the performance of the top 30 US stocks. Also known in financial spread betting as ‘Wall Street’

  • US S+P 500: a share index that defines the broader US stock market, it tracks the performance of the top 500 American firms

  • German DAX 30: a share index of the top 30 German companies in terms of order book volume and market capitalisation

  • French CAC 40: a share index listing of the 40 largest companies on the Euronext Paris, the largest French stock exchange

  • Japanese Nikkei 225: Refers to the price-weighted average of the top 225 firms in the Tokyo Stock Exchange

Financial spread betting on stock market indices allows investors to go either long or short. If, after your research, you feel that the combined value of the companies in the Index will decrease then you can spread bet on the Index to go down. Naturally, you can also spread bet on the Index to go up.

However, financial spread betting on indices is a leveraged form of trading and so whilst this increases your potential upside you can also lose more than your initial stake. This means that you need to be fully aware of the potential benefits and pitfalls before placing any spread bets.

It should also be noted that spread betting on indices is currently tax free*.

If you are looking to trade individual equities, see Spread Betting on Shares.



How to Spread Bet on Indices



As an example, let's assume you are interested in financial spread betting on the FTSE 100, you go on a spread betting site, e.g. Financial Spreads, and see that they are offering the current quote:

FTSE 100 Rolling Daily
: 5447.0 - 5448.0

This is what happens...


Market: FTSE 100 Rolling Daily
The Spread Betting Quote: 5447.0 - 5448.0
This Means That: You can speculate on the FTSE 100 Rolling Daily market going:

  Spread Betting Higher than 5448.0, or
  Spread Betting Lower than 5447.0

This is a Rolling Daily spread betting market meaning that it does not have an expiry date. If you decide not to close your position and the session ends then your position will automatically roll over into the next session.

Note: if a trade is rolled over then you will either be charged or credited for overnight financing based on whether you are speculating on the market to go down or up.

For additional details also see Rolling Spread Bets.
Points Traded: Spread bets on the FTSE 100 market are priced in £x per point.

Where a point is 1 point of the index's price movement.

E.g. if the FTSE 100 moves by 30 points then you would win or lose 30 times your stake.
Stake Size per Unit: You choose your stake per point, e.g. £2 per point, £5 per point, £10 per point, £20 per point etc.
Quick Staking Example: If, as an example, you went with a stake of £3 per point and the FTSE 100 moves 24 points, you would win or lose £3 per point x 24 points = £72.


Spread Betting Example | Taking a Long Position on the FTSE 100



Financial spread betting on the index to go higher

You Decide to Buy or Sell: The FTSE 100 to push:

  Spread Betting Higher than 5448.0? or
  Spread Betting Lower than 5447.0?

Let’s Assume You Decide to Buy:   Spread Betting Higher than 5448.0
You Choose Your Stake Size, Choosing: £2 per point
Now What?
  • You gain £2 for every point the FTSE 100 goes higher than 5448.0
  • You make a loss of £2 for each point the FTSE 100 falls lower than 5448.0
When Speculating on a Market to Go Up Your P&L = (Closing Value - Opening Value) x stake per point
 
Scenario 1 The FTSE 100 climbs and the spread betting market adjusts and moves to 5494.3 - 5495.3.
Close and Take a Profit? You could opt to leave your spread bet open or close it and take a profit. In this instance you decide to close your trade by selling at 5494.3.
Your P&L = (Closing Value - Opening Value) x stake per point
(5494.3 - 5448.0) x £2 per point
46.3 points x £2 per point
Your P&L = £92.60 profit
 
Scenario 2 The FTSE 100 falls and the spread betting market drops to 5407.1 - 5408.1.
Close and Restrict the Loss? At this point, you may choose to keep your spread bet open or close it, i.e. close your position and limit your loss. For this example, you choose to close your FTSE 100 spread bet by selling the market at 5407.1.
Your P&L = (Closing Value - Opening Value) x stake per point
(5407.1 - 5448.0) x £2 per point
-40.9 points x £2 per point
Your P&L = -£81.80 loss


Worked Spread Betting Example | Taking a Bearish View of the FTSE 100



Spread betting on the index to decrease

You Now Select Whether to Buy or Sell: The FTSE 100 moving:

  Spread Betting Higher than 5448.0? or
  Spread Betting Lower than 5447.0?

You Might Decide to Go Short:  Spread Betting Lower than 5447.0
You Select Your Stake Size, Let's Assume You Choose: £3 per point
So What Happens Next?
  • You make a loss of £3 for each point the FTSE 100 pushes above 5447.0
  • You gain £3 for each point the FTSE 100 falls lower than 5447.0
If You Are Selling a Market Your P&L = (Opening Value - Closing Value) x stake per point
 
Scenario 3 The FTSE 100 slips and the financial spread betting market moves to 5404.3 - 5405.3.
Close for a Profit? You may choose to let your trade run or close it in order to take your profit. In this example you choose to close your FTSE 100 position and buy at 5405.3.
Your P&L = (Opening Value - Closing Value) x stake per point
(5447.0 - 5405.3) x £3 per point
41.7 points x £3 per point
Your P&L = £125.10 profit
 
Scenario 4 The FTSE 100 climbs and the spread trading market is revised and changes to 5482.8 - 5483.8.
Restrict Your Loss?You could decide to leave your position open or close it, i.e. close your spread bet and limit your loss. In this example you decide to close your position on the FTSE 100 by buying at 5483.8.
Your P&L = (Opening Value - Closing Value) x stake per point
(5447.0 - 5483.8) x £3 per point
-36.8 points x £3 per point
Your P&L = -£110.40 loss


FTSE 100 Notes:



Stock Market Index Spread Betting Guides



Below we have individual trading guides with worked trading examples for each market:


European Stock Market Indices
American Stock Market Indices Other Global Stock Market Indices

Where to Trade Indices Tax Free*



You can speculate on Indices tax free* with the following spread betting companies:
Spread betting on indices is one of the most popular forms of trading. Indices themselves are the most traded markets in the world.

With this in mind, City Index currently† offers 1 point spreads on four major spread betting indices - the UK 100, Wall Street, Germany 30 and France 40 during market hours - which makes them worth looking at when if you are new to spread betting and CFD trading.

As with all markets, it is best to know exactly what it is you are spread betting on. So what are indices?

Indices are the cumulative value of a set of stocks. The stocks are generally based on the largest publicly-traded companies within their respective countries. When spread betting on indices, you are investing in the index as a whole.

As they are made up of the largest companies, the indices are very closely tied to the national economy. This means you are able to revise and update your spread betting strategy with global economic and financial events.

The indices which City Index offers 1 point spreads are:


UK 100 (aka FTSE 100)



The share index of the UK's 100 highest stocks. As London is the financial centre of Europe, the UK 100 is Europe's most important index.

The UK 100 represents around 80% of the London Stock Exchange's market capital. All companies listed on the UK 100 must include PLC in their name, indicating they are public limited companies. Trading hours are from 08:00 to 16:30 GMT.

Also see FTSE 100 Spread Betting.


Wall Street (aka Dow Jones)



The Wall Street index is based on 30 large publicly owned companies.

Unlike the UK 100, it is always the same 30 companies in the index, which is something to bear in mind when formulating your spread betting strategy. Market trading opens at 14:30 and closes at 21:00 GMT, during which time you can take advantage of City Index's 1 point spreads.

Also see Wall St Spread Betting.


Germany 30 (aka DAX 30)



The Germany 30 is measured by the performance of the 30 largest German companies, based on order book volume and market capitalisation.

The companies featured in the Germany 30 are decided on quarterly review. The market hours fall between 08:00 and 14:30 GMT.

Also see DAX 30 Spread Betting.


France 40 (aka CAC 40)



As with the Germany 30, the companies listed on the France 40 are included based on quarterly review.

At each review, the companies listed on Euronext Paris are ranked by the previous 12 months' performance and forty are chosen for inclusion. The market hours are between 07:00 and 17:15 GMT.

Also see CAC 40 Spread Betting.


Whichever index you choose to spread bet on, be sure to know the risks involved. City Index offers a range of seminars and guides to increase your knowledge of spread betting and risk management.

† spreads correct as of 19 Jan 2011.


Risk Notice

Stock Market Spread Betting - edited by Maxine Price, 02 September 2014.


For related pages and articles see:

FTSE 100 Spread Betting - guide last updated: 12 August 2014
This FTSE spread betting guide looks at how to trade leading UK shares and the FTSE 100 index (UK 100). As well as worked examples, where to spread bet and how to get live charts we review how read more

Dow Jones Spread Betting - guide last updated: 02 September 2014
This Dow Jones guide looks at how to spread bet on leading American shares and the Dow Jones (Wall St) stock market index. As well as daily technical analysis, worked examples, where to get live charts and where to trade, we review how read more

German Stock Market Spread Betting - guide last updated: 12 August 2014
This German stock market guide looks at how to spread bet on individual German shares, the MDAX and the main DAX 30 index. There are worked examples, where to spread bet and how to get live read more

S&P 500 Stock Market Spread Betting - guide last updated: 02 September 2014
This US stock market guide looks at spread betting on both S&P 500 shares and the S&P 500 index. Along with worked examples, where to spread bet on US shares and how to get live charts we read more

French Stock Market Spread Betting - guide last updated: 12 August 2014
This French stock market spread betting guide looks at how to trade individual shares and the CAC 40 index. As well as worked examples, where to spread bet and how to read more

Nikkei 225 Spread Betting - guide last updated: 12 August 2014
Our Japanese stock market spread betting guide has worked spread betting examples. It looks at where investors can spread bet on the Nikkei 225 index, how to get live charts and prices, where to practice your trading and read more

FTSE 250 Spread Betting - guide last updated: 12 August 2014
This FTSE 250 guide covers trading both UK Mid-Cap shares and the FTSE 250 index. Along with worked examples, where to spread bet and how to get live charts, we cover read more

Stock Market Spread Betting Library - guide last updated: 11 June 2014
An index of stock market trading articles from industry professionals that cover the key developments in the global equity markets. The commentary also considers read more


Breadcrumbs for "Stock Market Spread Betting" - Our stock market spread betting guide reviews key questions like where to trade & get stock index charts. It also has a 'spread' comparison, daily market snapshot, how to trade and read from the start of the page



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