Individual Share Spread Bets

• Spread betting companies started to introduce spread bets on individual shares around the mid 1990s
• Since then, this segment of the spread betting market has grown dramatically and all spread betting companies now offer a full range of shares including those in the UK, continental Europe and the US
• In fact if you don't see a market being offered on a particular stock as long as it has a reasonable capitalisation there's a good chance they'll make a market for you
• Spread betting on individual shares works in exactly the same way as a spread market on any financial product
• The spread better is offered a two-way price and then can go long or short with an associated pound per point.

A Spread Bet Example on Barclays

• The March contract of Barclays is priced at 468-472
• You are bullish and so decide to buy £5 a point on the offer price of 472
• A week or so later the share price drops and you decide to take your loss
• The spread betting company now quotes you 445-449
• You therefore sell on the bid price of 445
• Total loss on the trade is 27 points x £5 = £135

Daily/Weekly/Monthly Bets

On the larger capitalisation shares such as Vodafone and HSBC spread betting companies will often quote a number of different markets, such as a daily bet, a weekly market, and the traditional quarterly bet.

• Deciding which one to trade is again a result of your timeframe
• If with the Barclays spread bet example above you knew that you were going to liquidate the position whether at a profit or loss by the end of the week, then it would have been best to trade the weekly spread bet because the bid-offer spread might have been 3 points wide versus 4 for the quarterly bet.

Of course if at the end of the week you decided that you still wanted to stay with the spread bet position then you would have instructed your broker to roll the bet over into the next weekly market. If you're confused on points like these then you'll always find your spread betting broker happy to give advice.

Remember a spread betting company cannot give financial advice.