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 August 2014

European equities are set to open modestly lower as we take a small breather.

However, the bulls remain firmly in control as they believe that Draghi is in their corner warming up the printing presses.

Unlike US markets, the major European indices are still a fair distance from their all-time highs, but with the ECB apparently about to provide the ultimate economic backstop, traders have got something to aim for.

The economic data out of Europe certainly warrants some super stimulus and it has been encouraging for the bulls that Draghi acknowledges the fact, but could they be getting ahead of themselves?

Remember, this is a man that has being saying he will do whatever it takes for just over 2 years.

There's an impression that printed money will be entering the system imminently, but if the ECB has a different timing expectation, or if this turns about to be another 'verbal easing bluff', then we could see stocks turn sour on the whole affair.

Yesterday's massive jump in durable goods orders, which tripled the estimates, sparked a sharp rise in US equities.

Shortly after, consumer confidence data also came in stronger than expected and accelerated the rally.

This saw the Dow Jones continue its advance, reaching a fresh all-time intraday high and closing 50 points higher at 17,122.5.


Stock Market Spread Betting

 - 26 August 2014

The FTSE is set to rally this morning as it looks to catch-up on the strong gains seen during its bank holiday absence, though most European indices are expected to ease modestly.

The bulls were pretty quick out of the gates yesterday, having been imbued by Draghi's dovish comments on Friday night.

After years of middling reactive efforts to kick start the European economy, traders were glad to see an admission that they weren't working and that the ECB needed to go on the offensive.

Traders were particularly glad to hear the part where he said that the risks of doing too little outweigh the risks of doing too much, leading some to believe that a whole artillery battery of stimulus is on its way rather than just a bazooka.

As a result, US equities posted a sharp rally, with the S&P 500 reaching the 2000 mark for the first time ever and the Dow Jones gaining 66 points to 17,078.

However, geopolitical tensions have raised their head again and may temper any irrational exuberance, with US markets shedding ground in the afternoon and Asian markets dipping into the red.

Claims of Russian military incursions into the Ukraine continue and now President Petro Poroshenko has raised instability by dissolving parliament and calling early elections.

There are also concerns that the West is being drawn into a wider Middle East conflict, with reports that the US will send reconnaissance flights over Syria, possibly laying the path for air strikes.

If that wasn't enough, it appears that Egypt and the UAE have taken the initiative and been bombing extremists in Libya to the West's dismay.


Stock Market Spread Betting

 - 22 August 2014

European equities are set to open flat as traders turn cautious.

There's little in the way of economic data out today, so attention has turned towards the Jackson Hole Symposium where traders will look for further clarity on global interest rates.

With speakers from the Fed, BoE, ECB and the BoJ, it will be a smorgasbord of global monetary policy for traders to feast on.

The consensus for today is that comments will lean to the dovish side, but traders may not want to take the risk of a rogue tongue slip going into the long weekend.

Also, there could be a few rogue hawks lying in ambush to grab the mike following the most recent FOMC and BoE minutes.

US stocks continued to rise on Thursday, with hawkish Fed Minutes failing to spook the bulls.

The S&P 500 surged to record highs and the Dow Jones climbed 60 points to 17,039.

It's been a great week for equity traders, with the Dow gaining 2.3%, but the key question still remains; how long can these markets continue to rally with an inevitable rise in interest rates on the horizon?

For now though, the bulls seemed for focused on the short term, taking solace in larger than expected US jobless claims which helped push the markets even higher.


Stock Market Spread Betting

 - 21 August 2014

Even though there are several negative cues lining up, European shares are set to creep higher this morning.

Hawkish minutes from the BoE and the Fed, Ukrainian troops moving into rebel held territory, weak Chinese manufacturing data overnight and expectations of poor European PMI figures this morning should have traders on the back foot.

Despite this, markets have developed a remarkable ability to shrug off the bad news and have needle-like focus on the good, although no one seems quite sure what that is today.

If markets manage to finish the day in positive territory then it will either be an amazing feat of blind faith or because Mario Draghi unexpectedly decides to put his 'whatever it takes' words into action at Jackson Hole.

US equities continued to climb for the third consecutive day on Wednesday, with the Dow Jones index climbing almost 60 points to close at 16,979.

Stocks had initially fallen after the release of the FOMC minutes which showed a growing number of officials considering an increase in interest rates sooner rather than later.

However, the Dow managed to recover from the initial drop, spurred on by positive earnings data from Home Depot which has benefited from the improving housing market.


Stock Market Spread Betting

 - 20 August 2014

Yesterday's slip in inflation added more confusion into the UK rates debate and, with MPC and FOMC minutes coming up today, European equities are set to ease back a little on the open.

US stocks continued to gain momentum on Tuesday, reacting positively to corporate earnings and news on home building.

The bulls found solace in last month's bounce in home construction and solid consumer inflation figures, with the Dow rising 80 points to close at 16,919.




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 August 2014 update - The Dow Jones spread betting index closed higher on Tuesday as it extends this month's rally and tested July's high. Tuesday's mid-range close sets the stage for a steady opening on Wednesday. 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 August'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.


S+P 500 Spread Betting Analysis
27 August 2014 update - The S+P 500 spread betting index closed higher on Tuesday as it extends this month's rally. The mid-range close sets the stage for a steady opening when Wednesday'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 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 August 2014 update - The Nasdaq spread betting index closed higher on Tuesday as it extends this year's rally to new highs. The high-range close sets the stage for a steady-to-higher opening when Wednesday'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, monthly 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.



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 August 2014.


For related pages and articles see:

FTSE 100 Spread Betting - guide last updated: 12 August 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 August 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: 12 August 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 August 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: 12 August 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: 12 August 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: 12 August 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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