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

 - 27 November 2014

European equities are looking to open higher this morning, but continental markets are likely to outperform their peers.

The firming up of expectations that the ECB will start buying sovereign bonds is powering Eurozone markets higher, particularly the DAX 30.

Mario Draghi and Jens Weidmann will be speaking today and there is some cautious optimism building before the open that they will be singing from the same dovish hymn book as their colleague Vitor Constancio, who dropped some very big hints about sovereign QE in 2015 yesterday.

In contrast, the former star economy of the UK is slightly less optimistic after recent hawkish comments from Mark Carney.

The FTSE 100 is also being held back by caution ahead of today's OPEC meeting.

Whilst the organisation might offer some token gestures, energy markets are not expecting to see any real production cuts and so oil prices should remain low.

This in turn would be a dampener on the heavily energy weighted FTSE.

Not only is the US economy recovering at the fastest pace among the developed world, but confidence is growing that its strength can now weather a slowdown abroad.

Yesterday's economic data was, by and large, better than expected, with corporate results still surprising to the upside.

This saw the Dow Jones continue to rally and reach another all-time closing high of 17,841.


Stock Market Spread Betting

 - 26 November 2014

Overnight gains in Asia are set to see European equities track higher this morning.

Yesterday's mixed bag of data from the US led to fairly flat finishes as growth improved but consumer confidence saw a surprising slump.

The US GDP data was better than expected at an annualised rate of 3.9% and managed to keep investors in a good mood despite a weaker reading of 88.7 for consumer confidence.

The cautious optimism pushed the Dow Jones 23 points higher to 17,839, though the strong growth number also helped cap gains as traders fretted about a hawkish Fed.

With the benefit of a little more time to digest the figures, Asian markets have weighed things up and tipped the balance in favour of the bulls by registering modest gains.

Growth will be in focus again today as we get the second estimate for UK Q3 GDP and this will be a good reminder of the growing chasm that's developing between the US and everybody else.

Even though the rest of the global economy looks shaky, markets seem happy to ignore their own domestic plight and instead believe that a rising US can drag up all the other laggards.

How long that can last is anyone's guess.


Stock Market Spread Betting

 - 25 November 2014

Stock market indices are set to edge higher at the European open.

With mixed closes across the globe yesterday, and Asia currently unable to get a consensus of what's going on this morning, we can see the indecision that traders are wrestling with at the moment.

Although central banks around the world seem to be chucking the kitchen sink at the global economy, Jens Weidmann's comments yesterday, that ultra-loose monetary policy 'cannot permanently boost growth prospects', is an uncomfortable truth that most market participants know to be true.

Ahead of the latest US consumer confidence data, the Dow Jones climbed 13 points to a new record high closing level of 17,818.

The gains in US stocks, albeit pretty tiny ones, were driven by rallies in financial services firms, yet another sign that the economy is improving.


Stock Market Spread Betting

 - 24 November 2014

European equities are set to start flat, already fully digesting Friday's central bank euphoria.

A surprise rate cut from the PBoC and a big hint from Mario Draghi that outright sovereign bond purchases are getting closer sent stocks soaring.

However, the dovish news wasn't enough to keep the rally going in the US session.

Whilst the major US indices did notch up yet more gains, they closed well off their session highs.

The marginal rate of return on each attempt to pump up a flagging global economy seems to be deteriorating fast.

With so many of the world's major central banks falling back on loose monetary policy at the same time, the more suspicious traders are wondering how dire things really are to warrant such action.

Although the bulls are happy to play along with the charade of rising equity prices, the fact that economies which contribute 42% of the world's GDP (European Union: 23%, China: 12.7% and Japan: 6.5%) are still having to resort to such measures should be ringing alarm bells.

The Dow Jones reached a fresh all-time high on Friday, just shy of 17,900, largely on the positive US economic data.

From the housing sector to the labour market, the recovery is now becoming strong enough to withstand weakness abroad.

At the same time, more than three quarters of corporate earnings surpassed estimates in the latest reporting season, fuelling financial spread betting investor optimism.


Stock Market Spread Betting

 - 21 November 2014

Shares in Europe are set to open flat as persistent weakness continues to temper the bulls.

Despite US markets continuing to plough ever higher, that optimism is being offset by European traders focussing on weak domestic factors.

Yesterday's fragile manufacturing and services PMI figures were another indication of how precariously balanced Europe's economy is on the edge of recession.

On Monday, Draghi said that the ECB will consider doing more but wants to assess how well the current tools are working before acting again.

Well, the measures don't seem to be having any immediate impact, so traders will be on the lookout for some dovish comments from Draghi when he speaks this morning.

Positive data and better than expected earnings from retailers pushed the Dow into further highs yesterday.

After taking a hit following weak cues from Europe and Asia, US equity markets were able to bounce back and finished 0.2% up on the day.

Whilst this is another sign that the economy is improving, is it enough to raise interest rates?

Only time will tell.




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
27 November 2014 update - The Dow Jones spread betting index closed lower on Wednesday. The mid-range close sets the stage for a steady-to-higher opening on Thursday. Stochastics and the RSI are turning neutral-to-bearish warning bulls to use caution as a correction is possible near-term. Closes below the 20 day moving average crossing would confirm that a short-term top has been posted. If the Dow resumes the rally off October's low into uncharted territory, upside targets will be hard to project.


S+P 500 Spread Betting Analysis
27 November 2014 update - The S+P 500 spread betting index closed higher on Wednesday as it extends the rally off October's low. The high-range close sets the stage for a steady-to-higher opening when Thursday's session begins trading. Stochastics and the RSI remain neutral-to-bullish signalling that sideways-to-higher prices are possible near-term. If it extends the rally off October's low into uncharted territory, upside targets will be hard to project. Closes below the 20 day moving average crossing would confirm that a short-term top has been posted.


Nasdaq Spread Betting Analysis
27 November 2014 update - The Nasdaq spread betting index closed higher on Wednesday as it extended the rally off October's low. Wednesday's high-range close sets the stage for a steady-to-higher opening when Thursday's session begins trading. Stochastics and the RSI remain neutral-to-bullish signalling that sideways-to-higher prices are possible near-term. If it extends this year's rally, weekly resistance crossing is the next upside target. Closes below the 20 day moving average crossing would confirm that a short-term top has been posted.


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, 27 November 2014.


For related pages and articles see:

FTSE 100 Spread Betting - guide last updated: 06 November 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: 27 November 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: 06 November 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: 27 November 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: 06 November 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: 06 November 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: 06 November 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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