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Spread Bet Markets: Shares/Equities
Page Summary:

This page looks at how to use spread betting to trade individual shares. There's an incredible range offered from all the major stockmarkets as well as minor ones such as Greece and Ireland.

Also, the spread bets can easily be shorted offering total flexibility to the trader.

Spread betting on individual shares works in the same way as a spread market on any financial product.

The spread better is offered a two-way price, the bid-offer spread, and then can go long or short with an associated pound per point. For example -

  • Vodafone is quoted at 123.5 - 124
  • You buy £10 a point at 124 and then sell out at 130
  • Profit = 130 - 124 = 6 x £10 a point = £60
How to use Spread Bets to trade shares and equities
Available markets to trade

There are too many to list. Of course there are the main shares on the UK market, Wall Street and the big European bourses such as Germany. But then most spread betters offer shares on markets such as Finland, Greece, Ireland and Hong Kong.

Mostly only the larger capitalised stocks are quoted, so of course they'll be a quote on all the major companies but perhaps not on a smaller company with, say, a market capitalisation of £4million.

An example - Next shares

  • The market for Next shares is 1398 - 1402
  • You buy £2 a point at 1402
  • Then sell the position at 1527
  • Profit = 125 points (1527 - 1402) x £2 a point = £250
Note, the price of Next shares above will actually be around £14.00 and not 1400 but the spread betters normally quote without a decimal point so there's no confusion what a point is.
Daily Bets & Quarterlies are offered on shares

With most shares both the traditional daily Cash bet and Quarterlies are offered. And as usual if short term trading the Daily Bets are usually cheaper to trade (tighter bid-offer spreads) but there will be an overnight financing charge (if held overnight).

The quarterlies are more suited for medium to longer term trades, in excess of a week. For example, trade the quarterly if you're bullish on Vodafone or Barclays for the next several weeks or months.

Most spread bet brokers will quote 3 separate quarterly bets. For example, if the date is now January they'll offer a March, June and September bet. Tailor these to your trading view. If bullish for the next month or so use the March, if bullish heading into the summer trade the June etc.

Bets can be 'rolled over'
A roll-over is where a position from one month is rolled into the next. For example, if it is now the first week in March and you are long the March Abbey National spread bet this will expire on the 3rd Friday of the month (most financial and share bets expire on the 3rd Friday of their relevant month).

Assume the market has been moving higher but you feel the shares can go even higher so want to continue to keep the bet open. You'll need to place a rollover bet which will simultaneously sell the March contract and buy the June contract. This will mean your long trade will have been rolled over into the next month and is still open. Two points to note -

  • There is a small charge for rolling over a bet, and
  • If a quarterly bet isn't rolled over it will automatically be closed when the spread bet expires and any profit or loss will be debited from your account

There's an incredible range of equity spread bets available but do watch some of the bid-offer spreads because they can be expensive, especially when short term trading. But this depends on which market and how popular the share is.

Spread betting shares is a great training ground for the new trader as he or she is already likely to have experience in how the stockmarket works and operates.

WARNING! - Spread Bet Broker Advice

There are good spread bet brokers and there are bad ones.

Having a good broker won't guarantee you profits but a bad broker will probably lead to losses as a combination of their gamesmanship and suspect software takes its financial toll.

So who do I recommend?

Simple, the 2 brokers I personally use for my own spread betting (and I've used them for years) -

FREE Report : How to Learn Spread Betting and Prosper
How to build the all-important trading experience
Where to get trading help and advice
Which broker to use and why
Simple 2 month training plan to follow
Download the FREE report
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