Guide to FTSE spread betting

Introduction to FTSE spread betting:

Equity or stock market indices are designed to provide a snapshot of the performance of the broad market or a sector of the stock market. So, for instance, on any given day, a glance at the FTSE 100 (also referred to as the Footsie) will tell you in basic terms how well or badly the shares of the average large (top 100) UK company performed on that day.

Most UK spread betting companies offer ftse spread betting as well as betting on a wide range of other stock market indices. However, do not be dismayed if you look at the list of markets available and you don’t see one called the “FTSE 100” on your broker’s list. Quite often, spread betting companies use another label such as UK 100 or similar to refer to the same thing. In the same vein, spread betting companies will often refer to ‘Wall Street Index’ instead of using the trademark ‘Dow Jones’.

Mention the words ‘ftse spread betting’ and most people will automatically assume that you are talking about trading the Footsie 100 index which is displayed in the line in the chart below.

ftse spread betting

However, for the UK market, there is a wider range of indices provided by the same company that computes the ftse 100 index. For example, while the FTSE 100 index covers the largest 100 companies (actually, there are 102 companies on the list but that’s a technical detail), the FTSE 250 includes 250 medium sized (midcap) companies and the FTSE 350 index combines the constituents of the previous two indices into a single stock-market index—the largest 350 companies (by market cap) listed in the UK.

Other international equity market indices that are popular with spread traders include the following:

Popular US stock market indices:

  • Dow Jones Industrial Average (commonly referred to as the ‘Dow’)
  • Nasdaq Composite Index (commonly referred to as the ‘Nasdaq’)
  • Standard & Poor’s 500 Index (commonly referred to as the ‘S&P500’)

Popular European stock market indices:

  • German DAX Index (commonly referred to simply as the ‘DAX’)
  • French CAC 40 Index
  • Dow Jones EURO STOXX 50 which is regarded as the leading Blue-chip index for the Eurozone

Other widely followed global equity indices:

  • Hang Seng;
  • Tokyo Nikkei;
  • S&P/ASX 200 Index

Once you understand the basics outlined in the guide to spread betting section of this website, then in terms of the mechanics, ftse spread betting or spread trading on any stock market indices for that matter is really no different from spread betting shares, commodities, spread betting on bonds or anything else.

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