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

 - 30 October 2014

Stock market indices are set to open flat as traders try to decipher last night's Fed moves.

As was widely expected, the plug was pulled on QE.

However, there was no additional sweetener to keep the markets happy, just a reiteration of the 'considerable time' phrase.

The bulls were also put onto slightly awkward footing by the acknowledgement of improvements in the labour market.

Currency traders certainly thought this was a hawkish signal, with significant strength in the dollar across the board, but equity traders are still to make up their minds up about it.

Having rallied earlier in the session, the Dow Jones dropped sharply after the announcement but the commitment to keep interest rates low spurred a rebound towards the close.

The index finished unchanged at 16,987 as investors tried to figure out whether the US economy has enough velocity to sustain itself this time around.


Stock Market Spread Betting

 - 29 October 2014

European equities are set to start with gains this morning, tracking overnight momentum from the US and Asia.

Yesterday's US consumer confidence data surpassed estimates and kept investors optimistic regarding economic growth across the Atlantic.

Additionally, corporate results impressed again, overshadowing lower than predicted growth for house prices.

This saw the Dow Jones continue its two week rebound from the lows below 16,000, with the index gaining another 170 points to close at 17,008.

Interestingly, the usual apprehension before a Fed meeting seems to have been shrugged off even though the end of its quantitative easing program seems to be a dead cert.

Whilst the end has been widely telegraphed, it is the implicit 'deal' that the market thinks it has struck with the Fed where the risks lie.

In exchange for pulling the plug, markets are expecting to get something in return or they could throw another taper tantrum.

So, traders are getting bullish, positioning themselves long of the market in anticipation that the Fed will be extremely dovish with its forward guidance to prevent the bottom falling out of the market.

Hopefully they won't disappoint...


Stock Market Spread Betting

 - 28 October 2014

Equities in Europe are set to pare back some of yesterday's losses and start with modest gains.

There hasn't been anything particularly bullish on the newswires but the US and Asian sessions were pretty mixed and there's an assumption that if that was the best the bears could muster, then the path of least resistance must be higher.

There's some natural caution building ahead of this week's main event, the FOMC meeting, as the expectation is that the plug will be pulled on QE3, despite some US officials expressing concern over Europe's economic slowdown.

The logical view to hold is that the withdrawal of stimulus will be a negative for equities; however, the bulls are seeing a silver lining.

Whilst it's true that stock markets plunged when the Fed ended QE1 & QE2, the bulls are hoping that the FOMC will want to prevent a repeat by putting something extremely dovish in the statement to placate the urge to dump risky assets.

Either way, the general wait-and-see attitude amongst investors encouraged a relatively quiet trading session for the Dow Jones, which added just 20 points to 16,836.

Encouragingly for the bulls, a dip in oil prices below the $80 level hardly had any effect on the index.


Stock Market Spread Betting

 - 27 October 2014

European stocks look set to start on firm footing this morning following the largely positive results from the Eurozone bank stress test.

Although 25 banks failed, half have already taken measures to shore up their capital and none of them were considered to pose any systemic risk.

However, there is always some concern over the methodology.

Just as the 2011 tests didn't consider sovereign defaults, the 2014 tests have sought fit not to test for the impact of deflation.

It remains to be seen whether this is a glaring oversight that will come back to bite in the future, but for now traders seem happy to put those issues to one side and continue the upward momentum.

Corporate earnings in the US continued to impress investors who in turn felt confident enough to push equity markets even higher.

This encouraged a strong finish to the best weekly rally since 2013 after the previous four weeks of steep decline.

What was interesting was the readiness with which markets shrugged off the early concerns regarding the spread of Ebola after a New York doctor tested positive for the disease following his return from West Africa.


Stock Market Spread Betting

 - 24 October 2014

European equities are set to fall on the open following overnight news that a case of Ebola has reached New York.

Another bout of better than estimated corporate earnings in the US led by Caterpillar (up 5%) had driven the Dow Jones more than 200 points higher to 16,702 during the regular cash session.

However, when the story broke that a doctor in New York had tested positive for Ebola after returning from West Africa, we saw a sharp sell off in Dow futures.

The index saw an initial spike lower of more than 100 points and, whilst it has rebounded slightly at the time of writing, it is still in the red.

Interestingly, whilst European markets are set to take their cue from the overnight moves in US futures, Asian markets seem to have shrugged off the concerns, instead taking their cue from the positive cash session.

Global stock markets have staged an impressive comeback following the recent sell off, but the foundation of the rally continues to look shaky.

All the sources of uncertainty surrounding the world economy are still hanging over us, with prospects for growth being repeatedly revised lower and central banks still having to sing their dovish song to keep everyone happy.

It feels as though it would only take a few traders to get skittish to tip the markets back in the favour of the bears.




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
30 October 2014 update - The Dow Jones spread betting index closed lower on Wednesday. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI remain neutral-to-bullish signalling that sideways-to-higher prices are possible near-term. If the Dow extends the rally off last week's low, the reaction high crossing is the next upside target. Closes below the 10 day moving average crossing would confirm that a short-term top has been posted.


S+P 500 Spread Betting Analysis
30 October 2014 update - The S+P 500 spread betting index closed lower on Wednesday. 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 last week's low, the reaction high crossing is the next upside target. Closes below the 10 day moving average crossing would confirm that a top has been posted.


Nasdaq Spread Betting Analysis
30 October 2014 update - The Nasdaq spread betting index closed lower on Wednesday. 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 aforementioned rally, the reaction high crossing is the next upside target. Closes below the 10 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.



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, 30 October 2014.


For related pages and articles see:

FTSE 100 Spread Betting - guide last updated: 08 October 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: 30 October 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: 08 October 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: 30 October 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: 08 October 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: 08 October 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: 08 October 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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