Spread Betting on Sectors

Spread Betting on Sectors

What is a Sector?

Sectors are groups of companies that all operate within the same industry and are often subject to similar economic pressures and general trading conditions as each other.

For example, as of 1 Sep 2014, Bank of Georgia, Barclays, HSBC, Lloyds, RBS and Standard Chartered make up the components of the FTSE 350 banking sector.

A number of firms offer either FTSE 350 sectors or Euro Stoxx 600 sectors (see below).

What is a Sector Spread Bet?

Sector spread bets are a way of taking a view on an industry by giving investors exposure to a basket of underlying shares in a particular sector.

Why Trade Sectors?

Even when an industry is performing well, some companies within the sector can under-perform.

Therefore, trading a whole sector, rather than individual firms, can be a way of diversifying your risk.

E.g. if you think that the current economic outlook is going to be generally positive for the UK retail sector, but do not know which particular retail stock to buy, you could go long of the ‘FTSE 350 General Retailer’ sector and gain exposure to a group of leading companies in the retail sector.

Shorting a Sector

Don’t forget that with spread betting you can short a sector, so if you think a sector will perform poorly, you can bet against it.

What are the Constituent Companies in a Sector?

For more details on:

Typically Available FTSE 350 Sectors:

  • Aerospace & Defence
  • Banks
  • Beverages
  • Chemicals
  • Construction & Materials
  • Electricity
  • Electronic & Electrical Equipment
  • Equity Investment Instruments
  • Fixed Line Telecoms
  • Food & Drug Retailers
  • Food Producers
  • General Retailers
  • Health Care Equipment & Services
  • Household Goods & Home Construction
  • Industrial Engineering
  • Industrial Transportation
  • Leisure, Entertainment & Hotels
  • Life Assurance
  • Media
  • Mining
  • Mobile Telecoms
  • Non-life Insurance
  • Oil & Gas Producers
  • Oil Equipment & Services
  • Personal Goods
  • Pharmaceuticals & Biotechnology
  • Real Estate Investment Trusts
  • Software & Computer Services
  • Speciality Finance
  • Support Services
  • Techmark
  • Technology Hardware & Equipment
  • Tobacco
  • Utilities
Note that IG offer the above as both daily trades (Daily Funded Trades) and quarterly futures.

Typically Available Euro Stoxx 600 Sectors:

  • Autos
  • Banks
  • Basic Resources
  • Chemicals
  • Construction & Materials
  • Energy
  • Financial Services
  • Food & Beverage
  • Health Care
  • Industrial Goods & Services
  • Insurance
  • Media
  • Personal & Household Goods
  • Real Estate
  • Retail
  • Technology
  • Telecommunications
Note that the Euro Stoxx 600 sectors, aka EU Stoxx 600 sectors, are normally available as quarterly futures.

Where to Trade Sectors

The following spread betting firms offer sectors:

User Questions and Answers on Sectors

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