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

 - 26 January 2015

European stock markets are set to slide this morning following Syriza's win in the Greek national elections.

The anti-austerity party swept to power by a much larger margin than had been expected, with only 2 seats shy of a majority.

Previous speculation had been that a rainbow coalition may tone down Tsipras' ability to enact his anti-austerity pledges, but markets are beginning to tremble as his electoral success has put Greece on a head-on collision course with its creditors.

Unfortunately, the bullish scenario, one where Tsipras ends austerity and the Troika continue to provide Greece with emergency funding, looks unlikely.

One side will have to blink soon.

Amid an ongoing assessment of how much confidence was injected into global markets by the ECB's recent actions, US investors refocused on their own domestic agenda on Friday.

As such, the disappointing corporate earnings results made headlines and sent the Dow Jones 157 points down to 17,650.

However, the centre of attention over the weekend was back in Europe, and Syriza's victory has since seen the Dow futures drop by another 100 points.


Stock Market Spread Betting

 - 23 January 2015

Some lingering post-ECB QE euphoria is nudging European markets higher this morning, with many stocks expected to open with gains.

At the same time as the ECB was busy expanding its stimulus plan, banks and transportation shares across the pond rallied on improved earnings, thus accentuating the surge.

This saw the Dow Jones rise by 250 points to 17,812, effectively reversing January's losses.

Unfortunately, it's never plain sailing with the Eurozone and traders will now have to decide how they want to be positioned for this weekend's Greek election.

Alexis Tsipras, a former communist who's described the imposed austerity on Greece as 'fiscal waterboarding', looks set to take the premiership according to recent polls.

A win for the left winger will spark concern that he'll go through with his pledge to reverse austerity and refuse to pay their debts, creating a head on collision between Greece and the Troika.

The stock market bulls have enjoyed some decent gains already this year, so it will be understandable if we see a bit of profit taking today.


Stock Market Spread Betting

 - 22 January 2015

With traders hunkering down ahead of the ECB announcement, European shares are expected to open fairly flat.

Investors have been well prepped for what to expect today and there shouldn't be any major surprises.

Assuming they do opt for €50bn purchases per month for the next one to two years, as suggested by yesterday's leak, the deeper question is will it be enough?

Probably not; chucking printed money at the Eurozone when some southern states are incapable of, or are refusing to, implement economic reforms leaves the real problems of the union untouched.

However, for equity traders, this could be the start of a huge bull run.

Just like Japan, the US and the UK, one round of QE is seemingly never enough, once you pop, you just can't stop!

A rebound in crude oil pushed energy producers higher yesterday which in turn led to a rally in US stocks, with the Dow Jones gaining 72 points to 17,563.

At the same time, speculation grew that the European Central Bank is prepared to add more stimulus than recently predicted which should support the markets.


Stock Market Spread Betting

 - 21 January 2015

European equities are set to gain once more on the expectation of quantitative easing from the ECB tomorrow.

However, momentum is waning and there's a little apprehension in the air given that Draghi and the other ECB members have dropped so many hints over the last few months that markets appear to have priced in a fair wedge of stimulus already.

With nearly every trader on the planet expecting the bazooka to be fired, there is a real risk that Draghi will underwhelm the markets by only pulling out a shotgun.

Amid heightened volatility, the Dow Jones gained just 23 points to 17,494 as investors are getting concerned that slowing growth at the global level could hurt the US economy.

Although lower oil prices would normally be considered a boost to expansion, the International Monetary Fund cut its world growth outlook.

The only positive spot for US stocks was the technology sector.


Stock Market Spread Betting

 - 20 January 2015

The upward move for European equities is set to continue this morning as dovish hopes support sentiment.

Overnight, the IMF downgraded its global growth forecasts for 2015 and 2016 and urged central banks to maintain their loose monetary policies, something which the bulls will heartily welcome.

Also overnight, China provided the stock markets with a goldilocks GDP figure.

The annual figure dipped to 7.4% and, although this is just below the government's target of 7.5%, it doesn't imply a total collapse of the economy whilst leaving the door open for more stimulus efforts.

Add that to the expected effort from the ECB this Thursday and you can why some of the bulls are confident enough to hold onto their long positions.

The FTSE 100 rallied 22 points to 6593 yesterday led by gains for Tesco and Travis Perkins, which both had ratings upgrades, and Balfour Beatty which won a contract for public works.

The rise continued in overnight trading and a challenge of the 6600 mark has been successful, but with miners under pressure it remains to be seen whether the equity benchmark can hold its ground.




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
26 January 2015 update - The Dow Jones spread betting index closed sharply lower on Friday. The low-range close sets the stage for a steady-to-lower opening on Monday. Stochastics and the RSI have turned bearish signalling that sideways-to-lower prices are possible near-term. If the Dow extends this week's decline, the 38% retracement level of the October-January rally crossing is the next downside target. Closes above the 20 day moving average crossing would confirm that a short-term low has been posted.


S+P 500 Spread Betting Analysis
26 January 2015 update - The S+P 500 spread betting index closed lower due to profit taking on Friday as it consolidated some of Wednesday's rally. The low-range close sets the stage for a steady-to-lower opening when Monday's session begins trading. Stochastics and the RSI remain neutral-to-bearish signalling that sideways-to-higher prices are possible near-term. If it renews 2013's rally into uncharted territory, upside targets will be hard to project.


Nasdaq Spread Betting Analysis
26 January 2015 update - The Nasdaq spread betting index closed higher on Friday and the high-range close sets the stage for a steady-to-higher opening on Monday. Stochastics and the RSI are turning neutral-to-bearish hinting that a short-term top might be in or is near. Closes above the 20 day moving average crossing would confirm that a short-term low has been posted. If it extends the rally off December's low, reaction high crossing is the next upside target.


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.


What is a Stock Market Index?



This quick video guide from IG takes a look at what constitutes a stock market index:





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, 26 January 2015.


For related pages and articles see:

FTSE 100 Spread Betting - guide last updated: 07 January 2015
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: 26 January 2015
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: 07 January 2015
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: 26 January 2015
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: 07 January 2015
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: 07 January 2015
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: 07 January 2015
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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