FAQ Page 2 - Question 16

Q: When the FTSE 100 spread bet market gets very busy I've noticed that the bid-offer spread can sometimes widen, is this fair?

A: Yes, it's how markets work and it's not just the spread betters that widen their prices. In fact they're most probably only widening them because the futures or cash stocks have had their bid-offer spreads widened by the market-makers.

I can remember back in about 1992 when the UK entered the Exchange Rate Mechanism (ERM), the bid offer spread on the FTSE 100 futures widened to about 30 points at one stage, and there was possibly as much volatility in that market than there was in the crash of 1987.

These are obviously rare occurrences but even when the markets get a little bit busy you'll often see bid-offers widen for short periods of time.