UK Spreads
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UK Spread - Advantages
There are a wide variety of financial spread betting companies that focus on providing a service for UK investors.
These spread betting companies tend to offer markets on all of the major UK shares and indices such as the FTSE 100 index. A number also offer spread bets on FTSE 250 and AIM listed companies.
UK spread bettors can nearly always spread bet in Sterling regardless of the market on which they are trading. For example, crude oil is priced in US Dollars per Barrel and Gold is priced in US Dollars per Ounce. However, you can trade both of these, in Sterling, via your UK spread betting account.
As the above suggests, many of the UK facing spread betting firms offer easy access to a wide range of international markets which some UK investors may normally find difficult to gain exposure to.
In fact, some UK spread betting companies, such as Financial Spreads, offer a 24 dealing desk so that UK based investors can trade on international markets even when the underlying exchange may be closed. For more details, please see 24 Hour Spread Betting.
UK Spread Betting Companies
Spread Betting Account |
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| New Account Offer |
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| Online Account Application |
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| Candlestick Charts |
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| Credit Accounts Available |
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| Deposit Accounts Available |
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| Stop Loss Available |
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| Stop Loss (Automatic) |
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| 24 Hour Trading |
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| FSA Authorised and Regulated |
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The above spread betting services / markets may also be available with other companies. Also see Comparison Table Notes.
UK Shares Spread Betting
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.
For more details on trading equities see Shares Spreads.
UK and International Index Spread Betting
Stock Market Indices |
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| FTSE 100 Daily |
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| FTSE 100 Future |
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| Wall Street (Dow) Daily |
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| Wall Street (Dow) Future |
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| DAX 30 Daily |
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| DAX 30 Future |
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| S&P 500 Daily |
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| S&P 500 Future |
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| Other Indices |
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The above spread betting markets may also be available with other companies. Also see Comparison Table Notes.
For more details on trading stock market indices also see Index Spreads.
How to Spread Bet on UK Indices
FTSE 100 Index (December) Spread Trading Example
The current price of the FTSE 100 Index (December) market is 5216 - 5220 with Tradefair.
As with many leading indices, investors can place a spread bet on the future price of the FTSE 100 to go up or down in value. With the FTSE 100 Index (December) market, which closes on 18-Dec-09, you can speculate on:
a) the FTSE 100 to settle above 5220 on the closing date, or
b) the FTSE 100 to settle below 5216 on the closing date.
Note that with the FTSE 100 market you trade in £X per point, where a point is 1 point of FTSE 100 movement. As a result, if your stake was £4 per point and the FTSE 100 price moves by 8 points then you would see a change to your profits/losses of £32.
FTSE 100 Spread Betting Example
For example, let’s assume you see the real time price on a spread betting website and it gives a spread of 5216 - 5220. So, after your market analysis, you might feel that the FTSE 100 Index will rise and close above 5220. This implies:
- You think that the FTSE 100 should increase
- Therefore, you decide you are going to go long of the market at 5220 and risk £2 per point
- The market rises and so you let your trade run to the closing date of 18-Dec-09
- The market closes at a value of 5262
- Your initial buy price: 5220
- P&L = (Settlement Price - Opening Price) x stake
- P&L = (5262 - 5220) x £2 per point
- P&L = 42 x £2 per point
- P&L = £84 profit
However, if the market failed to move as forecast, and had the FTSE 100 decreased in value, closing lower at 5179, then you would have lost on this trade.
- Price you bought the spread bet at: 5220
- P&L = (Settlement Price - Opening Price) x stake
- P&L = (5179 - 5220) x £2 per point
- P&L = -41 x £2 per point
- P&L = -£82 loss
(Financial spread trading prices correct as of 10-Nov-09)
How to Spread Bet on UK Shares
British Airways (December) Spread Betting Example
Looking at the equities markets, the current price of the British Airways (December) market is 196.6p - 197.2p with paddypowertrader.
Like many shares listed on the leading exchanges, investors can speculate on the future price of British Airways shares to go up or down in value. With the British Airways (December) market, which closes on 15-Dec-09, an investor can place a spread bet on:
a) British Airways shares to close higher than 197.2p on the settlement date, or
b) British Airways shares to close lower than 196.6p on the settlement date.
Note that with the British Airways market you trade in £X per penny, where a penny is 1p of British Airways share price movement. As a quick example, if you invested £14 per penny and the British Airways share price moves 8p then that would be a difference to your P&L of £112.
British Airways Equities Trading Example
For example, let’s assume you see the real time price on an online spread trading website that gives the spread of 196.6p - 197.2p. After your analysis, you might come to think that the British Airways share price should rise and close above 197.2p. This would mean:
- You think that the British Airways shares will increase
- Therefore, you want to go long of, or buy, the market at 197.2p and you risk £7 per penny
- The share price rises. You let your bet run to the settlement date of 15-Dec-09
- The share price settles at 208.0p
- You bought the market at 197.2p
- Profits (or losses) = (Final Level - Initial Level) x stake
- Profits (or losses) = (208.0p - 197.2p) x £7 stake
- Profits (or losses) = 10.8p x £7 stake
- Profits (or losses) = £75.60 profit
Spread trading does not always go to plan. If the market failed to move as forecasted, and had the British Airways shares decreased in value, settling lower at 187.0p, then you would have lost.
- Initial buy price = 197.2p
- Profits (or losses) = (Final Level - Initial Level) x stake
- Profits (or losses) = (187.0p - 197.2p) x £7 stake
- Profits (or losses) = -10.2p x £7 stake
- Profits (or losses) = -£71.40 loss
(Spread betting prices quoted: 10-Nov-09)
"UK Spreads" last update by R Thomas, 31-Jan-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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