Spread Betting on Shares
The SpreadBets guide to Shares Spread Betting:
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1. About Shares Spread Betting
Share trading is, in many ways, one of the most fundamental aspects of all financial trading and investing.
The ability to buy and sell shares is long established. More recently, it has become possible to spread bet on the future value of shares ie speculating on what the price of a share will be in one minute, a few hours, days or even months.
Spread betting offers a few key advantages over share trading:
- Profits are free of capital gains tax*
- Transactions are free of stamp duty*
- An investor can go long or short. That is to say you can bet on the market to go up or down. Spread betting is one of the easiest ways to ‘Short’ a share
- Trading on margin allows you to leverage your funds. This means you do not need to lock up large amounts of capital. This naturally increases your upside. Note though that this is increasing your risk and, therefore, your potential downside. You can lose more than your initial investment
- There are, generally, no brokers fees or commissions
- This form of trading allows easy access to a range of International Shares eg you can spread bet on shares listed in the UK, USA, Germany, Ireland, Denmark, Australia, India, etc
If you are looking to trade whole stock market indices like the FTSE 100 or Dow Jones see Indices Spread Betting.
For specific examples and information on trading some popular equity markets see :
2. Where can I Financial Spread Bet on Shares?
Shares |
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| FTSE 100 Shares |
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| FTSE 250 Shares |
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| Wall Street Shares |
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| S&P 500 Shares |
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| Nasdaq 100 Shares |
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| DAX 30 Shares |
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| CAC 40 Shares |
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| Irish Shares |
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| Other Shares |
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The above spread betting markets may also be available with other companies. Also see Comparison Table Notes.
3. How to Spread Bet on Shares
Like many financial markets, you can spread bet on the future value of shares, ie you can spread bet on shares like Barclays, Shell, Rio Tinto etc to go up or down.
The current price of the BP (December) market is 438.3p - 439.3p with Financial Spreads.
This means you can spread bet on:
a) BP shares to finish higher than 439.3p on the closing date, or
b) BP shares to finish lower than 438.3p on the closing date
The BP (December) market closes on 16-Dec-08.
It is important to note that with UK shares, you trade in £X per penny, where a penny is 1p of the share price movement. For example, if your stake was £4 per penny and the BP shares move 10p then that would be a £40 difference to your profits or losses.
BP Spread Betting Example
Let's say you check the live price on FinancialSpreads.com and it shows a spread of 438.3p - 439.3p. Let’s also say you have done your analysis and think that the BP shares will go higher than 439.3p by the closing date.
That means:
- You have done your analysis and think that the BP (December) market will go up
- Therefore you go long (buy) at 439.3p with a stake of, let’s say, £3 per penny
- The market rises. You decide to let your bet run to the expiry date
- Let's say that the BP shares settles at 468p
- Opening price = 439.3p
- Profit / loss = (closing level - opening level) x stake per penny
- Profit / loss = (468.0p - 439.3p) x £3 per penny stake
- Profit / loss = 28.7p x £3 per penny
- Profit = £86.10
But if the market did not move as you originally forecast and had the BP shares gone down and the price finished lower at 422p, then you would have lost money on your trade.
- Opening price = 439.3p
- Profit / loss = (closing level - opening level) x stake
- Profit / loss = (422.0p - 439.3p) x £3 per penny stake
- Profit / loss = -17.3p x £3 per penny
- Loss = -£51.90
(Prices quoted as of 22-Oct-08).
4. Where can I find Real-Time Shares Spread Betting Prices?
All of the above companies provide access to real-time indices prices to their account holders.
Note that you may need to log into your account in order to see the live Shares prices.
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Financial Spreads
Spread Betting - No Fees, No Commissions, Free Charts and Live Prices.
Spread Bet on Indices, Forex, Commodities, Shares and more. For details see Financial Spreads.
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5. Where can I find Shares Candlestick Charts?
A number of the spread betting companies offer a variety of charts, including candlestick charts. Note that you may need to open an account with the respective company in order to see the charts and/or have full access to real-time charts that you can manipulate. Spread betting accounts are subject to status, terms and conditions.
Candlestick charts are currently available with:
Charts may also be available from other spread betting companies.
Example shares charts from Financial Spreads:
Naturally you can also access Candlestick Charts for equities listed in other Countries, eg US Shares Candlestick Charts:
Advert
Financial Spreads
Spread Betting - No Fees, No Commissions, Free Charts and Live Prices.
Spread Bet on Indices, Forex, Commodities, Shares and more. For details see Financial Spreads.
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"Spread Betting on Shares" last update by R Thomas, 03-Feb-2012
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
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