Some of the most popular markets for spread betting & online stock trading are entire stock markets and their movements such as the FTSE, CAC or the Dow Jones Index. An index value is created by adding up the stock prices of a certain grouping of securities into one value, and then tracking its movement compared to a base value on a particular date. Stock market index values are good indicators of trends in the general economy, as they reflect sentiment towards a particular sector or country. So if you think the Japanese economy is going to improve, you can buy the Nikkei Index. Or if you think the UK economy is heading for trouble, you can sell the FTSE 100.
Online stock trading & spread betting indices can also give you exposure to certain industry sectors. For example, the NASDAQ is made up of high-tech stocks, so if you think the sector is in for some hardship, you can bet that way. You can also bet on other sectors like banking or mining and so on. The majority of stock market index bets are on the FTSE100 and the Dow Jones – but many other stock markets around the world are available. Some of the tightest spreads on the market are available on spread betting Indices with many companies quoting 1 point spreads on Daily FTSE bets.
Types of Bets – Daily and Futures
You can take a short-term Daily Bet, to take an immediate position across a whole market. Or you can take a longer term futures bet, to gain exposure to market moves over several months. If you are doing a trade just for a few hours or days, then a Daily or Rolling Daily may offer you the best spread. If you are opening a position for more than a month, a “futures” style bet may offer better value. Spread betting can be a better option than stock trading in the futures themselves, because it usually involves a smaller minimum bet size, and spread betting companies often quote the leading indices even when the underlying markets are closed. You can take a position on Wall Street or the FTSE, 24 hours a day from Sunday night to close of business Friday
Tips for Spread betting on Indices
Want to learn to trade indices? Below are some tips that will help you get off to a good start.
Keep a close eye on the latest financial news and economic developments, as these can often affect how the market moves.
Each index behaves and trades differently, so it’s a good idea to follow the stock market index for a while and get to know these before diving in with a spread bet.
There are key psychological levels in every market, and if these are broken through, it can result in significant activity or volatility. For example the Dow Jones 10,000 level has proven to be an important psychological indicator.
Markets tend to move in unison, so what happens on the larger markets such as the Dow and FTSE can have an influence on other markets around the world. So even if you are not betting on those markets, it’s good to keep an eye on them. Spreads on Indices tend to be lower than any other markets. A handful of influential shares can sway the performance of the entire Index. This is especially important when a large company like Nokia or BP are announcing earnings.
List of stock market indexes offered by spread betting companies:
- FTSE 100 futures (UK)
- Wall Street Index futures (US)
- S&P 500 (US)
- NASDAQ 100 (US)
- Nikkei 225 Index (Japan)
- Hang Seng Index (Hong Kong)
- DAX 30 Index (Germany)
- CAC 40 Index (France)
- MIB 30 Index (Spain)
- SMI Index (Swiss)
- OMX 30 Index (Swiss)
- Dow Jones Euro STOXX 50 futures (European)
- FTX futures (Russian)
- HTX futures (Hungarian)
- ATX futures (Austrian)
- BEL20 Index (Belgium)
- SPI 200 (Australia)
- Singapore Blue Chiop
- India 50
- Korea 200
- China H-shares
Resources provided to keep informed about Indices
Most spread betting companies provide detailed, complex and timely information about Indices including:
- Market Updates
- Economic Indicators
- Third Party Research