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Spread Betting on Indices
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Where to Spread Bet on Indices
You can spread bet on Indices with the following companies:
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| FTSE 100 daily (spread size) |
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| Dow Jones daily (spread size) |
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| DAX 30 daily (spread size) |
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| Indices (min stake) |
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| Indices (more available) |
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Index spread betting may also be available with other companies - notes.
Index Spread Betting - Stock Market Review
Spread Betting on Indices - 23 May 2013
Equity investors have had a fantastic run this year; it has been hugely profitable and markets seem to have risen almost regardless of the news.
Despite the world economy being far from rosy, company valuations have soared to unseen levels.
They have benefited from huge injections of cash into the financial bloodstream and low rates of borrowing.
And let's not forget that investors have nowhere else to put the money; commodities, bonds, who wants to invest in those at the moment?
However, the see-saw trading session seen yesterday, which was fuelled exclusively by Federal Reserve comments/minutes, just goes to show the importance of central bank stimulus.
It also serves as a stark reminder that this positive environment for corporations is only a temporary measure; it won't last forever.
The big question now is whether this is the moment to 'sell in May and go away' or whether yesterday's almost 300 point range in the Dow Jones was merely a temporary bout of nervousness.
During his testimony to Congress, Ben Bernanke initially issued a warning that a premature withdrawal of QE could derail the recovery.
That statement sparked a rally in the Dow which saw the index hit a new record of 15,540.5.
However, shortly afterwards, he then remarked that the Fed might scale back their monetary stimulus should the job market keep improving.
Investors decided to focus on the latter and so the Dow fell back to end the day 26 points lower at 15,354.
Spread Betting on Indices - 22 May 2013
European equity markets look set to open marginally lower after what was another strong day for equities on Tuesday.
Despite there being no major economic data of note from the US, comments from Fed Presidents proved to be the market drivers once again.
This time QE was in favour, with St Louis Fed President James Bullard saying that the 'bond buying program should be maintained to boost growth', and so the Dow Jones rose by 42 points to 15,379.
Today, we should get a clearer idea of forward looking monetary policy when Fed Chairman Ben Bernanke testifies before Congress and the latest FOMC minutes are released shortly afterwards.
This may help us end the current speculation and let stock markets focus on the more traditional drivers.
Spread Betting on Indices - 21 May 2013
European equities look set to open a few points lower as fear of a QE slow-down ensues.
Across the pond yesterday, various Fed Presidents gave their views on quantative easing and hints that the Fed may ease back on its bond-buying program eradicated any gains for US equities.
Speculation surrounding QE should be given some clarity later this week as Fed Chairman Bernanke speaks and the latest FOMC minutes are released.
For the Dow Jones today, the remarkable trend of 18 straight Tuesday gains on the trot will be tested in what should be a fairly 'fearful' day of trading.
Having closed at its highest level in 13 years yesterday, all of a sudden, the FTSE 100 looks set to follow its American counterparts and break its all-time high.
That high of 6,930 was set back in the last millennium, just, on 30 December 1999.
Although we're unlikely to set a new record this week, with sharp moves to the upside doubtful given such highly inflated prices, we shouldn't have too long to wait if we can avoid any bad news.
Spread Betting on Indices - 20 May 2013
European stocks are set to open marginally lower this morning, despite strong gains being seen across Asia.
Life is getting harder for market commentators as there are only a finite number of ways of writing the same piece of news.
In case you weren't aware of the continuing theme in 2013, the US saw some improving data, more companies released better-than-expected earnings, and we are at yet more all-time highs.
The problem is that as long as economic data continues to improve and stimulus measures are kept in tact, nothing is likely to change unless investors get nervous.
This time around it was US consumer confidence and future economic activity sentiment that gave markets the boost, both of which are at five year highs.
Until something changes, it seems that most of the signs are pointing in one direction.
Spread Betting on Indices - 17 May 2013
European equities are set to open flat to marginally lower as a negative close in the US leaves traders eyeing up the exit door.
Another afternoon of awful US data yesterday looked set to be the basis for the now common place move higher on bad news across the Atlantic.
With expectations that the weak data would keep the end of the bond purchase program at bay for a little while longer, traders were able to shrug it off and close in on new all-time highs.
However, Fed members Richard Fisher and John Williams then joined the recent chorus of hawkish songs being sung and US markets didn't like it.
Hawkish Fed members repeating their previously aired hawkish comments shouldn't have such a surprising influence on the markets.
Nevertheless, just as we saw when markets sold off on the recent Plosser comments, perhaps their voices of reason are beginning to take hold amongst the stampeding bulls?
As a result, the Dow Jones removed 42 points from its books to close at 15,233.
Given the circumstances, the index seems to have held its ground fairly well.
In addition to Fisher and Williams' comments, Walmart, the world's largest retailer, posted Q2 profits below expectations and US unemployment benefits also rose.
Despite this, the underlying strength and support in the market is there to be seen.
Spread Betting on Indices - 16 May 2013
European shares are set to open flat to marginally lower as the bulls take a short breather.
Even though we saw some woeful data from Europe and the US yesterday, markets managed to muster enough momentum and twist enough logic to eek out another day of gains.
Despite the stark evidence that all is not well, confidence in the ability of central banks to steer their respective economies back to health remains high.
Whilst the bulls appear to be a little more cautious this morning, the bears still seem to be nonexistent.
Expectation is that another batch of weak economic data will soon be around the corner to encourage central banks to push the spread betting markets up again.
It appears that whether the economic news is good or bad, the result will be the same.
The Dow Jones gained another 60 points yesterday, despite some poor industrial data, as investors look for stimulating central bank policy to continue fuelling the rally.
Spread Betting on Indices - 15 May 2013
European equities look set to start on a positive footing as US markets take back the reins of sentiment.
Despite weak economic data in Europe and the Fed's Plosser calling for a tapering of bond purchases, bullish momentum remained resilient and pushed past any negative cues yesterday.
When Plosser called for tapering last week, the move initially had the effect of pushing US equities into negative territory. In addition, the Hilsenrath article, which focussed on the Fed mapping out an exit strategy, kept US markets subdued on Monday.
However, markets now seem to have shrugged off even the prospect of the biggest bearish cue that they could imagine as the rally becomes self fulfilling.
Even with a well communicated heads up that QE will come to an end, markets look to have kicked their crutches away and started skipping higher on their own volition.
European markets will have to interpret a host of GDP data this morning, expected to show continuing weakness in the region.
However, come this afternoon, any weakness in Europe is likely to be pared as the miracle on Wall Street buoys markets once more.
It may seem boring to say, but the records in the US indices keep falling.
Aside from the now usual all-time highs, Tuesday was the 18th 'gaining' Tuesday on the trot for a rather different type of record.
A positive report on the health of small businesses provided the impetus behind the surge and all seems fairly rosy at the moment, with increasing signs that the world's largest economy is recovering.
Spread Betting on Indices - 14 May 2013
European equities are set to open higher, taking their cue from a positive Asian session.
Yesterday saw some choppy trading in Europe and the US, with investors' indecision seeing the major indices close only marginally higher or lower.
Despite the pickup in US Retail Sales, any optimism was kept in check by the flat Business Inventories as concerns about future demand kept firms cautious.
On the other hand, Asian markets seem to have interpreted the data more bullishly, focusing on the Retail Sales and a possible pick up in their own exports.
Also, looking to the week ahead, the possibility of upcoming US data painting a sturdier picture has begun to creep into valuations.
However, with plenty of muttering and speculation about the tapering of the Fed's asset purchases, could we see a reverse of the 'bad news is good' logic that has characterised much of the rally?
With the Fed assuring us that rates will be on hold until unemployment gets down to 6.5%, any positive data that reduces the current 1% buffer could fuel concerns that the days of easy monetary policy are numbered.
Despite signs that the US consumer is spending more at retailers, this wasn't perceived to be a strong enough indicator to maintain the equity market rally.
As a result, the Dow Jones stock market index closed 25 points lower.
With the earnings season drawing to a close, this week will be dominated by the results of US retailers including JC Penney and Walmart.
Spread Betting on Indices - 13 May 2013
European equities look set to open flat as financial spread betting investors wait for further cues.
Despite another set of all-time highs in the US on Friday, and the associated images of high-fiving traders on the NYSE floor, that confidence hasn't carried over to other regions.
Asian markets are trading mixed and Europe looks set to be equally sceptical with a flat start.
Friday saw the Dow Jones and S&P 500 close at their fourth record high of the week, with the Dow closing above the 15,100 level.
As this quarter's earnings season comes to a close, with the majority of companies beating profit expectations, the rally has generally been driven by low-growth defensive stocks.
The next question surrounds whether cyclical stocks will start to experience the same fortunes.
Spread Betting on Indices - 10 May 2013
European stock markets are set to open mixed as the negative close in the US and a choppy Asian session raise questions over the longevity of the rally.
Overnight, the recent US winning streak came to an end when the Fed's Charles Plosser, a known uber-hawk, came out and, surprise surprise, said something hawkish.
He voiced his opinion that the pace of stimulus should be curtailed somewhat, and the markets reacted disapprovingly.
The Dow Jones closed the day 20 points lower, although some of the losses appear to have been reversed during this morning's trading.
Whilst Plosser's views on scaling back asset purchases are widely known, for the market to turn negative on the repeat of such comments shows how reliant traders have become on central banks.
Despite the central banks' best efforts to keep markets rolling higher, trading volumes have begun to recede.
The elevated prices being asked for equities are becoming unjustifiable for many investors given the underlying economic reality which they are being asked to ignore.
However, fear not. Ben Bernanke is due to speak this afternoon and is sure to say something dovish to get the markets back onto his track.
Spread Betting on Indices - 09 May 2013
European shares look set to open on a mixed footing this morning, despite another successive bullish close in the US doing its best to drag us higher.
Asian trading was also mixed and investors are growing increasingly uneasy about this rally where one has to ignore the fundamentals and put your blind faith in the central banks.
Considering that 5 OECD central banks have cut rates in May alone so far, those who have bet against the rally have become martyrs to their belief that the fundamentals still matter.
Today, the BoE has its own opportunity to pump up the markets but, despite Mervyn King being a believer in printing to prosperity, the rest of the MPC have managed to curtail his efforts.
Expectations are that the hawks on the MPC will be able to keep him away from the printing press until his after his final meeting next month.
In yesterday's American session, US indices came off a little as some investors saw an opportunity to book profits after an extended run.
For others, the small dip was seen as another opportunity, especially since it was backed up by some strong economic data releases.
As a result, the Dow closed up another 50 points at 15,100.
Spread Betting on Indices - 08 May 2013
European equities are set to open marginally higher as a strong finish in the US and a surge in Chinese trade growth is likely to keep the bulls ticking over.
However, unlike previous rallies to all-time highs, the bulls still seem to be a long way from irrational exuberance.
When the Dow surged to new highs in 2007, US Treasury Secretary Hank Paulson stated that 'This is far and away the strongest global economy I've seen in my business life time'.
Now compare that to the current US Treasury Secretary Jacob Lew who last month said 'This is not a time for complacency. Tail risks have receded recently, but global growth remains weak, and unemployment is still too high'.
His comments resembled the current sentiment amongst investors and, whilst overt bullishness marked the top in 2007, the lack of it in 2013 may point towards higher prices.
Many traders remain bearish and a lot of money remains on the sidelines. Until they capitulate and everyone starts sounding like Hank Paulson, the top may be some way off.
Although the fundamentals don't justify current valuations on their own, global efforts by central banks are doing a good job of inflating them.
The Dow Jones and other world spread betting indices were also given fresh impetus following Tuesday's strong German factory data.
The S&P 500 has now closed at all-time highs for four consecutive days and this demonstrates the faith that investors have in equities compared to other asset classes.
Spread Betting on Indices - 03 May 2013
European equities are set to open flat as spread betting investors consider how to trade today's Non-Farm Payrolls number from the US.
Following the surprise slump in March, traders will be looking to see if that was a one off or whether it was the start of a sustained slump in jobs growth.
Only yesterday, the Fed criticised the US government for hampering growth with its sequester and said that thinking tax rises and spending cuts wouldn't hurt the economy would be akin to believing in financial alchemy.
Also, like the March figure, this weeks APD figure has come in below expectations, once again stirring suspicions of a weaker Non-Farms number.
However, with the Fed on standby to increase asset purchases should the economy require it, would a weak figure be bad for equities?
Whilst central banks and financial markets continue to recreate something from 'the Emperors New Clothes', with Ben Bernanke parading around handing out cheap money, traders seem able to shrug off almost any weakness.
Improved confidence saw the Dow Jones rally 110 points to 14,818 after the ECB signalled its determination to drag the Eurozone economy out of ongoing recession by cutting rates.
However, US markets had additional reasons to be cheerful, with the number of Americans filing claims for unemployment benefits dropping to a low last seen in January 2008.
Nonetheless, the renewed optimism will have to be confirmed by the Non-Farm Payrolls data which is expected to show a rise of 146,000 jobs.
Spread Betting on Indices - 02 May 2013
European equity markets are set to open lower this morning, tracking overnight declines in the US and Asia.
Unfortunately, the FOMC statement was something of a non-event.
Markets had been hoping that the run of disappointing US economic data would be addressed with some nudge towards looser policy.
However, the sentence 'The Committee is prepared to increase or reduce the pace of its purchases' indicated that the current weakness isn't enough.
With no immediate ramping up of stimulus, US markets edged lower as it seems that the economy will have to deteriorate further before the Fed steps in again.
Today is the turn of the ECB and, whilst an interest rate cut is largely priced in, the markets could well be disappointed again.
Like Ben Bernanke, Mario Draghi is likely to suggest that the central bank is reaching the limits of its abilities, calling on those responsible for fiscal policy to do more. This is exactly what the financial markets don't want to hear.
Markets will not be buoyed by central banks putting the fate of their economies in the hands of bickering bureaucrats whose austerity measures and reforms are threatening their own careers.
Instead, markets will be hoping for an indication that some 'non-standard measures' will be on the way to provide immediate relief.
During the early part of yesterday's US trading session, a drop in the ISM factory index combined with a slowdown in ADP employment figures to weigh on equities.
Later on, the FOMC meeting did not bring anything new, with the Fed maintaining its asset buying to spur growth.
Finding no reason to be cheerful, investors decided to take some profits off the table and sent the Dow Jones 136 points lower to 14,703.
Spread Betting on Indices - 01 May 2013
With most of Europe taking the day off, UK equities are set to open flat as traders tread water ahead of key central bank meetings.
With only the UK in action today and the crucial FOMC statement coming after the close, today's trading is expected to be light and directionless.
The UK's Manufacturing PMI is set to be neither here nor there as it's expected to show that the sector remains marginally in contraction.
The first of May, also known as Labour Day or International Workers Day, is particularly pertinent this year given yesterday's unsurprising all-time high in Eurozone unemployment, rising to 19.2 million.
In better times it was an ode to the efforts of the individual worker. However, as growth continues to stutter and austerity continues to bite, today is set to be a day of protest from the growing ranks of those who can't find work.
Despite the weak economic backdrop, stock markets have continued to cautiously advance and this is in no small part due to central bank efforts to prop up the global economy.
Although a lot of pundits are suggesting that tonight's FOMC statement will be a non-event, from the market's perspective it better have a bullish climax.
Consumer confidence in the US climbed to a five month high in April as the perception about the world's biggest economy has improved.
As if to emphasise that, a separate report also indicated a significant rise of property values in 20 cities.
Although the US is not yet in the position to pull the rest of the developed world out of recession, it is currently viewed as the best of a bad bunch.
As a result, the Dow Jones traded cautiously, as one would expect ahead of FOMC meeting, but did manage to push 31 points higher to 14,841.
Spread Betting on Indices - 30 April 2013
European equity markets are set to open higher this morning on expectations that this week's central bank meetings will be littered with dovish comments.
Yesterday's stock market optimism was fuelled by the hope that central banks around the world will come to the rescue of stuttering economies with yet more monetary stimulus.
Some pundits are suggesting the prospect of an ECB rate cut on Thursday as the reason for the European moves higher, but this has been on the cards for some time and has been largely priced in.
The real issue is whether they can do anything else to promote growth in the region.
Mario Draghi has stated that he is looking at 'various tools' to bolster the Eurozone but he has also said that the ECB is reaching its operational limits.
Considering the ideological clash amongst many of its members, Draghi's options are being limited; it doesn't look like there will be much more to follow.
The real hope this week is the Federal Reserve. Looking at the broad weakness in the dollar yesterday, it looks as though financial spread betting markets believe they will provide the stimulus to keep the bulls going.
We had thought that the Fed would start scaling back on quantitative easing some time this year, however, following the run of weak economic data and low inflation, they now have the justification to keep the presses running.
Many are now speculating that the Federal Reserve will at least maintain its commitment to bond buying at its meeting on Wednesday.
In addition, the US housing sector is on the mend, with pending home sales rising 1.5% against estimates for a 1.1% increase. That helped push the Dow Jones 106 points higher to 14,813.
Spread Betting on Indices - 29 April 2013
Despite US markets making multiple new highs in April, most European markets put in their high for the year back in mid-march and are still some distance off their all time highs.
With equity markets walking a precariously mildly-bullish tight rope over a chasm of fundamental stagnation, it won’t take much of a gust of bearishness to unbalance sentiment. And with the end of April fast approaching the old St. Legers day adage will be on everyone’s lips.
Probably the biggest saviour that bulls could get this week is from the FOMC statement on Wednesday.
Recent comments from Fed members indicated that there had been serious consideration given to scaling back quantitative easing. However, following a sustained run of weak economic data, it is hoped that those discussions now appear premature.
On Friday the US Commerce Department released its GDP figures which indicated a lower than expected expansion rate. That confirmed worries that despite the recent optimism, the world’s biggest economy is still struggling to move up a gear.
As a consequence the Dow Jones declined slightly, falling 9 points to 14,705 as investors started to prepare themselves for a busy week with plenty of economic reports on both sides of the Atlantic.
Spread Betting on Indices - 26 April 2013
European equities are set to ease slightly on the open following some mixed Asian trading and a modest pullback into the US close as caution crept in ahead of today's US GDP figure.
The UK economy narrowly avoided slipping into a triple dip recession yesterday, with first quarter GDP expanding towards the top end of estimates at 0.3%.
Whilst critics of the coalition's austerity measures were notably quiet, George Osborne was bereft of any cocksure 'I told you so' comments and instead warned that turbulent times still lay ahead.
Spread betting markets were equally chagrin, with the FTSE 100 closing just 7 points higher at 6426.
GDP from across the Atlantic is set to decide sentiment today, with analysts forecasting a surge to 3%.
However, even if the data comes in on estimate, we're unlikely to see President Obama and Ben Bernanke exchanging high fives.
Much of the pick up is due to previously delayed defence spending and businesses stocking up on inventory which, as the recent negative retail sales data indicated, they may fail to shift later in the year.
Similarly to the UK, serious headwinds are on the economic radar in the US and even if the figure comes out as expected, it won't be any reason to break out the ticker tape parade.
Nevertheless, the Dow Jones did manage to resume its rally yesterday, gaining 48.5 points to 14,713.5, on better than expected jobless claims figures and as earnings continue to top estimates.
Spread Betting on Indices - 25 April 2013
In Europe, stock market indices are set to open fairly flat as the bulls pause following this week's solid gains.
In addition, a mixed finish in the US and some choppy trade in Asia has failed to provide any directional cues.
Today will see the release of the UK's Q1 GDP figure and, unfortunately for George Osborne, it's a pretty quiet day for economic news, meaning that he may have more attention than he would like.
Adding to the Chancellor's sleepless night will have been the unwarranted yet timely kickings the UK has received from the IMF, Fitch and notable market participants such as Bill Gross.
However, whilst Ed Balls will be salivating over the prospect of a triple dip recession and the opportunity to make some political capital, markets are likely to be more pragmatic about today's figure barring any extreme readings.
Analysts' estimates range from -0.3% to 0.3% and anywhere in this region would be neither here nor there for the 'bob along the bottom' economy.
Whilst a negative number would naturally provide left wing Keynesians with fodder that the Government's austerity measures are wrong, markets are still likely to give them their vote of confidence for now.
Yesterday's US economic data was a bit of a mixed bag, giving a slight advantage to the sellers who pushed the Dow Jones 34 points lower to 14,673.
On the one hand, first quarter earnings continued to exceed expectations but on the other hand macro data was weaker than hoped.
Durable goods orders crashed by 5.7% last month against predictions of just 2.8% drop.
Spread Betting on Indices - 24 April 2013
European equities are set to open higher this morning, tracking a strong close in the US and firm gains in Asia as an expectation of further monetary easing continues to fuel the bullish mood.
Indices surged yesterday as weak economic data around the globe convinced traders that policy makers will have to engage in more monetary stimulus to keep their respective economies afloat.
Despite the clear signs of contraction in global manufacturing, the prospect of the quantitative easing horse being flogged once more seems to be enough for traders to shrug off news that would otherwise sink equity valuations.
Although today's start is expected to be firm, the FTSE is set to under perform its peers as some constituents go ex-dividend, knocking 9 points off the index.
The corporate earnings in the US continued to surpass the estimates with Netflix and Travelers leading the rally in equities.
On top of that, new home sales data came in slightly above consensus and that added to investors' optimism.
As a result, the Dow Jones moved 143 points higher to 14,715, with a short spike down in afternoon trading following a bogus tweet about bombs at the White House.
Spread Betting on Indices - 23 April 2013
European equities are set to open flat ahead of a busy day for economic data.
The global economy will get a snapshot of the manufacturing sector today with PMI data out from China, Europe and the US.
The HSBC Flash Manufacturing PMI for China has already sparked caution by coming in weaker than expected; yet another sign of a global slowdown.
In Europe, alongside the manufacturing data, we will get Services PMI data which is also expected to show that the region remains mired in contraction.
In the UK, the Public Net Sector Borrowing requirement is set to be released showing that annual UK Government borrowing came in marginally below official forecasts.
While a minuscule victory for George Osborne, the overall debt level remains tentatively high and any negative surprises would probably cause traders to reassess the recent downgrade by Fitch.
In the US, as well as the Manufacturing PMI data, we will also see the latest New Home Sales data.
Yesterday's strong start in Europe was eradicated by the weaker Existing Home Sales data so traders will certainly be cautious for any further signs of trouble in the US housing market.
In a relatively quiet session, the Dow Jones gained 35 points to 14,574 after being driven by rallies in the energy and mining sectors.
The initial slump in indices, sparked by a weak reading for existing home sales, was reversed once investors had a second look at the numbers and decided that housing is on the mend.
In addition, the New York Fed's William Dudley provided comforting words about support should the market need it.
Spread Betting on Indices - 22 April 2013
European equity markets are set to open significantly higher on positive cues.
We are currently expecting the FTSE to open 49 points higher at 6336, the CAC to gain 12 points to 3664 and the DAX to rise 27 points to 7487.
US markets closed higher on Friday, buoyed by a host of decent corporate results and optimistic expectations that this week's bellwethers will do the same.
Already, this positive mood has seen Dow futures gaining 70 points overnight.
Asian markets are also trading sharply higher, led by the Japanese Nikkei which is nearing a 5 year high.
Japan's optimism seems to be founded on the fact that they didn't receive any explicit singling out at the G20 for their exceptionally loose monetary policy.
Despite warnings against competitive currency devaluations at the G20, Japan actually received commendation for their actions which has given the green light for the bulls to storm higher.
The UK is also set to show remarkable resilience at today's start, especially following the IMF's recent caution and the credit downgrade from Fitch.
It seems that traders aren't giving much weight to the IMF's u-turn on austerity or to a ratings agency that deems France a better credit risk than the UK.
Amid better-than-expected corporate earnings in the US, market participants decided to close some of their short positions ahead of weekend, pushing the Dow Jones 44 points higher to 14,530.
Meanwhile, G20 finance officials agreed that more needs to be done on a global level to boost economic growth which also kept stock markets well supported.
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.
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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.
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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:
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:
 Higher than 5448.0, or
 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:
Higher than 5448.0? or
Lower than 5447.0?
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| Let’s Assume You Decide to Buy: | 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
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| When Speculating on a Market to Go Up Your P&L = | (Closing Value - Opening Value) x stake per point |
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| 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 |
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| 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:
Higher than 5448.0? or
Lower than 5447.0?
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| You Might Decide to Go Short: | 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
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| If You Are Selling a Market Your P&L = | (Opening Value - Closing Value) x stake per point |
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| 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 |
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| 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:
- Financial spread betting prices taken from by Financial Spreads, 2 November 2011
- Investors could also choose to speculate on the FTSE 100 in euros/point and US dollars/point
- With online spread betting you can also speculate on the movement of a large variety of other asset classes including:
Indices Spread Betting Guides
Individual stock market index spread betting guides with worked trading examples for each market:
Where to Trade Indices Tax Free*
You can speculate on Indices tax free* with the following spread betting companies:
With financial spread betting you can lose more than your original stake or investment. Spread betting carries a high level of risk to your capital. Please familiarise yourself with the risks that are involved and before trading, ensure that financial spread betting matches your investment objectives. Seek independent advice where necessary.
Spread Betting on Indices - edited by MJ, 23 May 2013.
For related pages and articles see:
Spread Betting on Indices - guide last updated: 23 May 2013
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A Guide to Stock Market Spread Bets - guide last updated: 10 May 2013
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Stock Market Spread Betting Library - guide last updated: 29 April 2013
An index of stock market trading articles from industry professionals that cover the key developments in the global equity markets. The stock market financial spread betting commentary also considers ...more: Stock Market Spread Betting Library.
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With spread betting you can lose more than your original stake or investment. Spread betting carries a high level of risk to your capital so please familiarise yourself with the risks that are involved and, before trading, ensure that spread betting matches your investment objectives. Seek independent advice where necessary.
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* Based on current UK tax law. Tax law may change and can differ depending on your personal circumstances.
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