Rules Of Thumb for Trading Different Spread Bet Months

• Day Trading - Trade the daily spread bets
• 2-5 day trading outlook - Trade the weekly spread bets
• 1 or more week - Trade the monthly or quarterly spread bets

Out of Hours Trading

The hours of trading on the London stockmarket are 8am - 4.30pm, with the FTSE 100 futures on LIFFE trading until 5.30pm. But spread betting companies will make a market on certain products 'after hours' with some brokers offering trading 24 hours a day.

How do spread betting companies do this? The simple answer is that there is a strong relationship between how the US markets trade and how London trades. If the US market makes a significant move lower in the final two hours of its trading session (when the London Stock Exchange is closed) then London is sure to open lower the following morning, in what the market refers to as sympathy.

In the after hours market a Spread betting company will move its quote up and down alongside where the US markets are trading. The US stockmarket via the futures on the Dow Jones, S&P 500 and Nasdaq 100 also trade for nearly 24 hours a day on their respective electronic trading platforms, so it is not that hard for an experienced market participant to estimate where the FTSE should be trading, even when it is closed.

Liquidity is a factor in after hours trading because the majority of the market is not at their desks trading, so the bid-offer spread will be wider, due to this lack of liquidity.

Some spread betters don't like trading in the after market for many reasons, perhaps the main one being that they don't like to follow the markets 24 hours a day. But whatever your view the flexibility that the spread betting companies offer is certainly there, should one choose to use it.

Expiration Dates & Other Housekeeping

Whatever index or market you want to trade, it is always excellent advice to make sure that you first find out all the basics and nuances of the contract involved. These include the expiry dates, the roll over dates, the opening-closing times, minimum point size, market holidays and any other relevant information.

For example, it is a quirk of the Hong Kong Hang Seng stock index and in turn the respective spread bet that it closes between the local hours of 12.30pm-2.30pm. Preparation combined with a full understanding of the product and market you're trading in is certainly one of the key ingredients for successful spread betting.

Competition is fierce amongst the Spread betting companies
As the FTSE and other big stock indexes are the most common spreads to trade, bid-offer spreads are often cut to drum up business
If FTSE 100 is what you want to trade then make sure you check around the different companies to see who offers the best value
A current list of the different spread bet firms is listed below.