Spread Betting on Indices
Spread Betting
Spread Betting on Indices

Spread Betting on Indices



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

Spread Betting on Indices

 - 23 April 2014

Strong earnings and corporate deals managed to help US equity markets to their sixth day of gains on the trot.

M&A announcements, particularly from the pharmaceutical sector, gave stocks a boost, while Existing Home Sales fell by less than expected to give the bulls some macro economic news to celebrate.

As a result, the Dow Jones ended 65 points higher at 16,515, although European equities are set to open mixed this morning as traders remain cautious.

Whilst the US earnings season is doing a good job of keeping the bulls fuelled, another sign of weakness from China's manufacturing industry is cause for concern.

The gains over the last few days have seen a welcome turn around after the initially weak start to the month.

However, as we now edge near to the top of the recent range, traders are looking hesitant just in case the sellers re-emerge.


Spread Betting on Indices

 - 22 April 2014

European equities are set to grind higher, tracking a positive session overnight in the US.

Although gains are expected, markets are likely to be a bit groggy following the long weekend as traders catch up on geo-political events.

The Ukraine crisis is a nightmare to decipher what's going on and its subsequent affect on risk.

The last big headline was the surprise agreement between the West and Russia at the Geneva talks to de-escalate the situation, but any perceived optimism has been scuttled by the clear detachment from events on the ground.

In a very quiet day of trading for the Wall Street industrials, the Dow stock index managed to add weight nonetheless.

It was the fifth straight day of gains for the Dow, marking the longest winning streak for six months, with the index ending up 40 points at 16,449.

Whilst US traders will keep one eye on the situation in Ukraine, most of their attention will be given to a heavy week of corporate earnings.


Spread Betting on Indices

 - 17 April 2014

European equities are set to open flat on caution and mixed cues.

Overnight, US markets closed higher as markets took Janet Yellen's dis-inflation worries as a dovish signal, but poor results from Google after the close has undone the positive handover.

The talks in Geneva between the West and Russia are also keeping traders in a cautious mindset.

No one is quite clear what is happening on the ground in the Ukraine, following numerous reports of gun battles, mass defections, building occupations, and tank thefts.

As a result, investors will not want to put on large positions going into a long weekend when the expectations for the talks are so low.

The Dow Jones Industrial Average saw its third day of gains on Wednesday despite mixed economic data from the US and positive Chinese economic growth data.

The Dow climbed 162 points during the course of the day, ending the day up almost 1%.

Investors welcomed solid company earnings and a speech given by Federal Reserve Chair Janet Yellen who said she expects the economy to reach maximum employment and meet inflation targets by the end of 2016.


Spread Betting on Indices

 - 16 April 2014

An overnight surge in US markets is seeing European equities set to open higher.

Although yesterday's European session was dogged by worries of the escalating situation in the Ukraine, something kicked off a buying spree in the US which is dragging everyone else along with them.

Pundits have put the reversal down to everything from rumours that Japan will downgrade its economic assessment, possibly leading to yet more QE, all the way to HFT bots messing around with nervous markets.

What is for sure is that Kiev and Moscow aren't about to shake hands and put their differences aside, so jittery market conditions are set to persist.

After a shaky start to the trading session, the Dow Jones made a late rally to end the session up 89 points, or 0.6%, on Tuesday to close at 16,262.

Rising tension in Ukraine and poor consumer confidence in the US housing market weighed down on the equity markets, however encouraging earnings spurred the bulls on, allowing the Dow to make a late rally.

Johnson & Johnson climbed 8%, whilst Coca Cola shares jumped 3.7% after reporting better than excepted revenue.


Spread Betting on Indices

 - 15 April 2014

European equities are set to open flat as they're caught between two competing poles of sentiment.

On the one hand, pulling traders towards the bullish camp is the recovery taking place in the US.

Its resilience and ability to shake off shocks like the weather should be a good indicator for the global economy.

However, arguing for a more bearish stance, right on Europe's doorstep is the Ukrainian tinderbox that has the possibility to flare up into an incident of unimaginable size.

Closer to home the economic outlook remains murky.

Whilst the alarm bells of deflation on the continent have been sounding for a while, today's expected seventh consecutive decline in the UK CPI is sure to get some speculating that we are in for the same fate.

Although deflation is supposed to be negative for stocks, in a roundabout way it could be bullish.

Pressure is already mounting on the ECB to fire off some QE bazookas and the last time the UK got down to around these levels of inflation the BoE actually did, although that was more of a coincidence rather than a direct attempt at staving off deflation.

The Dow Jones Industrial Average rose by 146 points on Monday, recovering from its sharp fall last week.

The boost in stocks came from stronger than expected retail data that helped put the mind of some traders at ease given the current situation in the Ukraine.

The rise in the Dow was also spurred on by solid earnings from Citigroup which reported its net income for the first quarter up 4%.




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
24 April 2014 update - The Dow Jones spread betting index closed lower on Wednesday and the mid-range close sets the stage for a steady-to-lower opening on Thursday. Stochastics and the RSI are neutral-to-bullish signalling that sideways-to-higher prices are possible near-term. If the Dow extends this year's rally into uncharted territory, upside targets will be hard to project. Closes below the 20 day moving average crossing are needed to confirm that a short-term top has been posted.


S+P 500 Spread Betting Analysis
24 April 2014 update - The S+P 500 spread betting index closed lower on Wednesday and the low-range close sets the stage for a steady-to-lower opening on Thursday. Stochastics and the RSI remain bullish signalling that sideways-to-higher prices are possible near-term. If it extends the rally off November's low, weekly resistance crossing is the next upside target. Closes below the reaction low crossing are needed to confirm that a short-term top has been posted.


Nasdaq Spread Betting Analysis
24 April 2014 update - The Nasdaq spread betting index closed lower on Wednesday and the low-range close sets the stage for a steady-to-lower opening on Thursday. Stochastics and the RSI remain bullish signalling that sideways-to-higher prices are possible near-term. If it renews the rally off November's low, September's high crossing is the next upside target. Closes below the reaction low crossing are needed to 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.



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:



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:
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

Spread Betting on Indices - edited by Maxine Price, 23 April 2014.


For related pages and articles see:

Spread Betting on Indices - guide last updated: 23 April 2014
Spread Betting on Indices - the spread betting guide to trading Indices markets, including where to spread bet on Indices, how to spread bet on Indices and the best way to ...more: Spread Betting on Indices.


A Guide to Stock Market Spread Bets - guide last updated: 28 January 2014
A guide to stock market spread betting reviewing the stock markets, dividends, index spread betting comparison, stock market trading costs, where to trade indices, index spread betting technical analysis, market commentary and ...more: A Guide to Stock Market Spread Bets.


Stock Market Review w/e 19 July 2013 - guide last updated: 19 July 2013
Yesterday's better-than-expected US corporate earnings triggered a 38 point rally in the Dow Jones to a fresh record high of 15,529. The release of lower jobless ...more: Stock Market Review w/e 19 July 2013.


Stock Market Review w/e 12 July 2013 - guide last updated: 12 July 2013
European indices are set to start on the front foot this morning after Ben Bernanke's comments outweighed the dithering Fed. In a sign of trepidation ahead of ...more: Stock Market Review w/e 12 July 2013.


Stock Market Review w/e 5 July 2013 - guide last updated: 05 July 2013
In Europe, indices are set to open lower as the bulls struggle to maintain their momentum. Despite yesterday's gains, US markets closed well off their highs and ...more: Stock Market Review w/e 5 July 2013.


Stock Market Review w/e 28 June 2013 - guide last updated: 28 June 2013
European equities are set to open lower following a weak close in the US and another blood bath in Asia. The recent never ending rally almost seems like ...more: Stock Market Review w/e 28 June 2013.


Stock Market Review w/e 21 June 2013 - guide last updated: 21 June 2013
Following the FOMC press conference, all asset classes got pummelled and everyone fell back in love with the dollar. Given the speed and volatility of the moves lower ...more: Stock Market Review w/e 21 June 2013.


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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