Shares Spread Betting
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CleanFinancial's guide to shares spread betting.
Where to Spread Bet on Shares
Each of the following offers a wide range of shares spread betting markets.
Comparison Notes
Shares Spread Betting Account
The companies in the table above offer clients a wide selection of shares, stock market indices, forex and commodities markets.
With regards to trading through reputable companies, each of the above is authorised and regulated by the Financial Services Authority. Note that financial spread betting accounts are subject to status as well as terms and conditions.
To read a review on any of the companies listed in the table above simply click on the relevant company logo.
Stock Market News and Tips
Updated daily, we offer a range of articles covering the key global stock markets from different views and angles.
Shares Spread Betting – Share Charts
Each of the following providers offer charts to help you with your shares spread betting (the larger firms will offer these as standard).
Comparison Notes
Like the FinancialSpreads.com example shown below, you can often choose candlestick charts.
In the vast majority of cases you can choose to see market movements over different time intervals. Shorter-term traders will prefer the 1, 2, 3, 10 and 30 minute intervals. Those traders with a medium-to-long view will probably prefer the hourly, daily and weekly intervals.
To help your technical analysis, on FinancialSpreads.com you can add moving averages, Bollinger bands, RSIs etc
Shares Spread Betting Live Prices, Trading Platforms and Software
Each of the companies listed below will provide clients with live prices.
Certain spread betting companies offer clients software/trading platforms that they have to download. Having said that, most firms, including the ones listed below, offer more practical web-based platforms.
A web-based spread betting platform lets you access your spread betting account from the office, from your PC at home etc without the need to download and install any trading software.
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Shares Spread Betting - Free Demo Accounts
If you are looking to test a new stock market strategy or theory, then it might be worth looking into a Demo Account / Practice Account.
These are free test accounts where you can practice your financial spread betting on numerous markets, including UK shares, US shares and German shares as well as stock market indices like the FTSE 100 and Dow Jones.
Comparison Notes
Guides to Spread Betting on Shares by Country / Stock Market Index
On CleanFinancial we offer reviews on 100s of different shares covering key equities from the UK, US, Germany, France and Ireland. For each individual equity we answer the following questions:
- Where can I Spread Bet on the Share?
- Where can I Trade for Free on the Share?
- How to Spread Bet on the Share?
- Where can I find Free Live Prices for the Share?
- Where can I find Free Charts for the Share?
To find the stock you’re interested in trading, simply click on the Country / Stock Market Index below. You will then find a list of shares that we have reviewed.
Stock Market Index Spread Betting
Whilst many investors spread bet on shares, the most popular spread betting markets are the stock market indices. Rather than taking a position on an individual share you can speculate on a whole index such as the FTSE 100, Dow Jones or even Indian Nifty 50. For more details see:
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
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Advantages of Shares Spread Betting
- Spread bets are not subject to tax* - you are not actually buying and selling any stocks or shares. You are simply speculating on the future value of a share. Therefore there is no Stamp Duty, no Income Tax and no Capital Gains tax.
- Two Way Trading - being able to 'short' a market offers you a range of opportunities. With shares spread betting you do not have to speculate on shares to go up. If your research leads to you think that the Google share price will go up, you can, of course, bet on it to go up. However, if you think that the Apple stock will go down then you can bet on it to go down.
- No Commissions or Brokers Fees - because you are trading directly with a spread betting company, and not through a brokerage, there are no broker's fees or commission charges.
- Speed - you are speculating on the future price of a market and, as a result, trades are generally accepted automatically or at least in the order of seconds. You don’t need to wait for a broker to fill your order.
- Wide Variety of Markets
- The simple range of markets makes spread trading an investment option worth considering. Spread betting firms tend to offer thousands of markets including Stock Market Indices like the FTSE 100 and Dow Jones, Crude Oil, Gold and Forex markets like EUR/USD, GBP/JPY etc.
- Spread betting also offers you access to a wide range of shares. With a company like Financial Spreads you can trade UK, US and German shares. However you can also spread bet on equities listed in France, Holland, India, South Africa, Sweden etc
- Control - another benefit is that you can close a losing trade in order to limit your losses and likewise you can close a winning trade in order to bank a profit. Note that you can also ‘part close’ a trade, i.e. closing part of your spread bet but keeping part of it open. Again this is an important risk management feature that can help restrict losses and lock in profits.
- Convenience and 24 Hour Trading - when the closing bell sounds at the end of the normal trading day, not all spread betting markets close. So whilst the London, New York and Frankfurt stock markets close, many important spread betting markets remain open. Some remain open throughout the night. Be aware though that most shares spread markets are not open 24 hours a day.
- Risk Management and Trading Orders - investing does have its drawbacks. Nevertheless, there are a few steps you can take to minimise your downside. You can add:
- Stop Loss Orders to your bets. This means that when a market moves against your position, the Stop Loss will close your trade and prevent you from losing any more money. Some spread betting companies will help by adding a stop loss to every trade. Stop Loss orders do not limit your upside, however it should be noted that not all Stop Losses are guaranteed.
- Guaranteed Stops to your spread bets. These work like Stop Loss orders but are guaranteed to close your trade at the level you specified. They normally come with a slightly wider spread.
- Limit Orders to your trades. Limit orders help you to lock in a profit. A Limit order would close and settle your spread bet if and when the market you are trading moves, in the way that you successfully forecast, and through a certain price level. In most instances you'll be able to state the level at which your Limit order is set.
These orders will often help you adhere to your trading strategy simply by helping you close your trades at price levels you originally stipulated.
They also help you manage you positions when you’re away from your PC.
- Free Data and Information – a good number of providers eg Financial Spreads and Capital Spreads now offer a wealth of free data to help their clients. You can get Heat Maps that highlight the shares that are going up / down, plus there are economic calendars showing what data is scheduled to be released during the week. Sometimes there is also technical analysis to accompany the candlestick charts that are available.
Spread Betting Risks
Whilst spread betting offers a wide range of benefits, it is also important to remember the potential drawbacks.
With spread betting you can lose more than you originally staked or invested. Spread bets carry a high level of risk to your capital. Ensure that spread betting matches your investment objectives. Make sure you familiarise yourself with the risks involved. Where necessary, seek independent advice.
Shares Spread Betting and Risk Management
As mentioned above, spread betting does carry a high level of risk to your capital. However there are a number of things you can do to help limit your risks including making use of:
- Smaller stakes
- Guaranteed Stop orders
With a lot of spread betting companies you can trade with stakes as small as £1 per point or $1 per point.
So to gain a little exposure you could just trade a stock market index like the FTSE 100, Dow Jones or German DAX for £1 per point.
Likewise you could spread bet on UK shares for £1 per penny. For example, if you speculate on Barclays shares to go up, with a £1 per penny stake and if the share price rises by 60p then you would make 60p x £1 per penny = £60.
Of course the Barclays shares could fall. If they dropped by 77p, then with your £1 stake you would lose 77p x £1 per penny = £77.
Note that you can trade the markets in Dollars, Sterling or Euros. If you want to trade in Euros then 60p x €1 per penny = €60.
To help reduce your losses you could add a Guaranteed Stop order at let's say, 50p.
So if you were financial spread betting on Barclays it would mean that your position would be closed if the share price moved against you by 50p. Therefore, instead of losing £77, you'd only lose 50p x £1 per penny = £50.
However, assuming you predicted the direction of the shares correctly then your profit would still be £110 if they moved 110p or £65 if the Barclays share price moved 65p.
For a more fully worked trading example please see below.
A key element of spread betting is keeping your greed under control. Making use of Guaranteed Stops and trading with smaller stakes can help to reduce your risk.
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
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How to Spread Bet on Shares
Let’s say you want to spread bet on HSBC and when you check the Capital Spreads site you see they are pricing the HSBC Rolling Daily market at 638.7p - 639.6p.
This means you can spread bet on the HSBC share price to:
- Move higher than 639.6p, or
- Move lower than 638.7p
When spread betting on UK shares you trade in £x per penny. So, if you chose to have a stake of £15 per penny and the HSBC share price changes by 6p then that would make a difference to your bottom line of £15 per penny x 6p = £90.
Rolling Daily Shares Markets
An important aspect of this Rolling Daily Market is that there is no predetermined closing date. If your trade is open at the end of the day, it will stay open and roll over into the next trading session. If a spread bet is rolled over and you are speculating on the market to:
- Rise - then you will pay a small overnight financing fee, or
- Fall - then you will usually receive a small credit to your account
For more information, see Rolling Spread Bets.
HSBC Rolling Daily Shares Trading Example
Going back to the spread of 638.7p - 639.6p, let’s assume that you have done your research. As a result of your market analysis you think that the HSBC share price looks like it will move higher and go through the 639.6p level.
As such, you then decide to buy the HSBC market at 639.6p and risk £5 per penny.
This means that you make a profit of £5 for every penny that the HSBC shares increase and move above 639.6p. However, you will make a loss of £5 for every penny that the HSBC share price drops below 639.6p.
Put another way, when you ‘Buy’ a spread bet, your profit/loss is calculated by taking the difference between the settlement price of the market and the price you bought the spread at. You then multiply that difference in price by the stake.
If after a few days the stock started to move upwards then you could choose to close your position and therefore lock in your profits. As an example, if the market increased then the spread, determined by the spread betting company, could be adjusted to 663.6p - 664.5p.
You would close your spread bet by selling at 663.6p. As a result, with the same £5 stake you would calculate your profit as:
Profits (or losses) = (Closing Price - Opening Price) x stake
Profits (or losses) = (663.6p - 639.6p) x £5 per penny stake
Profits (or losses) = 24.0p x £5 per penny stake
Profits (or losses) = £120 profit
Spread betting on shares is not always that simple. In the above example, you had bet that the share price would rise. However, it could fall.
If the HSBC share price had dropped then you might decide to close your position in order to limit your losses.
So if the market pulled back to 618.8p - 619.7p, you would close your trade by selling at 618.8p. As a result, your loss would be:
Profits (or losses) = (Closing Price - Opening Price) x stake
Profits (or losses) = (618.8p - 639.6p) x £5 per penny stake
Profits (or losses) = -20.8p x £5 per penny stake
Profits (or losses) = -£104 loss
Note: HSBC Rolling Daily equities market quoted as of 18-May-11.
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
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Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
'Shares Spread Betting' by DB, updated 23-May-12
For related pages also see:
Shares Spread Betting, updated 23-May-12
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Spread Betting on Shares - FTSE 250 Companies, updated 01-May-12
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Spread Betting on Nasdaq Shares, updated 01-May-12
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Spread Betting on Irish Shares, updated 01-May-12
Spread Betting on Irish Shares. Where to find Irish Shares real-time prices and charts, how to spread bet on Irish Shares shares and the most popular spread betting questions on Irish Shares...read article: Spread Betting on Irish Shares.
Spread Betting on German Shares, updated 01-May-12
Spread Betting on German Shares. Where to find German Shares real-time prices and charts, how to spread bet on German Shares shares and the most popular spread betting questions on German Shares...read article: Spread Betting on German Shares.
Spread Betting on French Shares, updated 01-May-12
Spread Betting on French Shares. Where to find French Shares real-time prices and charts, how to spread bet on French Shares shares and the most popular spread betting questions on French Shares...read article: Spread Betting on French Shares.
Spread Betting on Dutch Shares, updated 01-May-12
Spread Betting on Dutch Shares. Where to find Dutch Shares real-time prices and charts, how to spread bet on Dutch Shares shares and the most popular spread betting questions on Dutch Shares...read article: Spread Betting on Dutch Shares.
Spread Betting on Small Cap Shares, updated 01-May-12
Spread Betting on Small Cap Shares. Where to find Small Cap Shares real-time prices and charts, how to spread bet on Small Cap Shares shares and the most popular spread betting questions on Small Cap Shares...read article: Spread Betting on Small Cap Shares.
Spread Betting on Delisted Shares, updated 01-May-12
A spread betting review of delisted shares....read article: Spread Betting on Delisted Shares.
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