What is FTSE Spread Betting?

In traditional investing, stock brokers quote prices of stocks. They quote shares, commodities and other financial instruments. These prices include a buy and sell price for every market.

Essentially spread betting works the same because it has two prices. One price is the bid price and the other price is the offer price. The higher number is the offer and the lower number is the bid price.

If a spread bettor believes the market price will increase, one buys. A prediction the market will decline results in selling the bid price.

Stake Sizes in Spread Betting

Spread betting works a little differently than traditional investing. This is because one buys or sells on the bid or offer price. With each buy or sell price, a trader determines a stake size is.

This stake is the trader's bet on which way the price will move. In other words, no ownership of stocks or shares exists by traders. A trader can make money on increasing and declining markets.

Spread bets can be found on markets like major indices, the FTSE. The FTSE is an index which packages many stocks together into one. The FTSE 100 and 250 have stocks from the highest selling companies.

The FTSE 100 is a combination of 100 stocks from different companies. Companies included in the FTSE 100 are companies with high stocks. This is applied to the FTSE 250 but the number changes to 250.

FTSE Spreads with Spread Betting Companies

Bets on the FTSE can be found through almost any online company. Other spread betting firms outside the UK also offer the FTSE. They offer it as it is a major index and is globally traded.

To bet the FTSE one needs to find the current spread from a firm. Each firm quotes a spread on the FTSE so spreads are not the same. Although they will be different spreads they will be similar.

The FTSE is quoted at 5231-5233 whilst the current price is 5232. A trader may bet on the FTSE to increase in market price or decrease. A buy bet or go long means one anticipates the price to increase.

In this case one will make a wager on the FTSE 100 offer price, 5233. The opposite happens if the trader speculates the price to decrease.

The wager is determined by a trader as there is no minimum stake. The profits are found by determining how many points the market moved. This is figured by taking the opening price minus the current price.

This number is multiplied by the wager set by the spread bettor. These are the profits earned for spread betting the FTSE 100. The losses are calculated in the same way using these figures.

Spread betting the FTSE is popular as it is a major stock index. It is well known among traders and fairly easy to understand. The FTSE is a great stock index for novice spread bettors to trade.

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