Shares Spread Betting Guide

Trading Stocks and Shares
Less than 5% of shares spread bets are on individual stocks.


Live Shares Spread Betting Chart and Prices

Use the chart below to search for many of the leading firms e.g. Apple, Deutsche Bank, Goldman Sachs, Google (Alphabet), Santander, Telsa etc.



Where Can I Spread Bet on Shares?

Most of the large FCA regulated spread betting companies offer live charts and prices on the shares although the range of shares on offer does change a lot.

See the table below for a shares spread betting comparison.


Shares Spread Betting Comparison

Company Shares? Shares
Min Stake
Mobile
Apps
Guaranteed Stop Free If Not Triggered? Inactivity Fee Trading Offer Apply
Financial Spreads Review check_box £0.50 check_boxiOS
check_boxAndroid
check_box £0 check_box Apply
City Index Review check_box £1 check_boxiOS
check_boxAndroid
cancel £0 cancel Apply
ETX Capital Review check_box £0.50 check_boxiOS
check_boxAndroid
cancel £15 cancel Apply
IG Review check_box £1-5 check_boxiOS
check_boxAndroid
check_boxWindows
check_box £12 cancel Apply
InterTrader Review check_box £1 check_boxiOS
check_boxAndroid
cancel £0 check_box Apply


Popular Shares – Live Prices:

Risers and Fallers – Live Prices:

Introduction to Shares Spread Betting

In many ways, share trading is one of the most elementary aspects of all financial trading and investing.

The ability to trade shares is long established. Recently however it has become possible to place spread bets on the future value of shares. For example: speculating on the price of a share in a few minutes, a few hours, a few days or even a few months.

Spread betting offers a few key advantages compared to traditional share trading:
  • Transactions are free of stamp duty*
  • Profits are free from capital gains tax and income tax*
  • Trading on margin allows you to leverage your funds. This means you do not need to lock up large amounts of capital when you trade. This naturally increases your upside. Note though that this increases your risk and, therefore, your potential downside. You can lose more than your initial investment
  • An investor can go either long or short. Ie, you can bet on the market to going up or down. Financial spread betting is one of the easiest ways to ‘short’ a share
  • This form of trading allows easy access to a range of International Shares. For example, you can spread bet on shares listed in the USA, UK, Ireland, Germany, South Africa, Australia, Sweden, Japan, etc.
  • There are generally no broker’s fees or commissions
  • You can generally trade a variety of other asset classes from the same spread betting account. For example you can speculate on Stock Market Indices, Forex and Commodities


How to Spread Bet on Shares

As an example, let’s say that you are considering financial spread betting on HSBC, you look on a spread betting website, e.g. City Index, and get the real time price:

HSBC Rolling Daily: 543.9p – 544.7p

This is what you need to know about how it works.

Spread Trading Market HSBC Rolling Daily
The Spread 543.9p – 544.7p
How the Spread Works Now you can speculate on the HSBC Rolling Daily market moving:

  arrow_upward  Above 544.7p, or
  arrow_downward  Below 543.9p

This is a ‘Rolling Daily’ trade and so there is no closing date. If you decide not to close your position and the trading session ends then your trade will roll over into the next trading day.

Note that if a trade is rolled over then you will either receive or be charged interest for overnight financing based upon whether you are speculating on the market to move higher or lower.

To learn more also see our guide to a daily spread bet.
Units Traded Spread betting trades on the HSBC market are priced in £x per penny.

Where a penny is 1p of the UK equity’s price movement.

E.g. if HSBC moves 35p then you would win/lose 35 multiples of your stake.
Trade Size You work out how much you would like to stake per penny, e.g. £2 per penny, £5 per penny, £20 per penny etc.
Quick Staking Example As an example, if you decided on a stake of £4 per penny and HSBC moves by 23p, you would lose/win £4 per penny x 23p = £92.


Spread Betting Example | Going Long of HSBC

Spread betting on the UK equity to increase

You Now Select Whether to Buy or Sell HSBC to move:

  arrow_upward  Above 544.7p? or
  arrow_downward  Below 543.9p?

Let’s Say You Want to Buy   arrow_downward  Above 544.7p
You Choose Your Stake Size, Let’s Say You Opt For £5 per penny
What Happens Next?
  • You make a profit of £5 for each penny HSBC moves higher than 544.7p
  • You will lose £5 for every penny HSBC moves lower than 544.7p
If You Buy a Market Your Trading Profits/Losses = (Closing Price – Opening Price) x stake per penny
 
Situation 1 HSBC moves higher and the market moves to 561.0p – 561.8p.
Time to Lock in Your Profit? At this point, you may decide to let your trade run or close it in order to take your profit. For this example, you choose to settle your position and sell at 561.0p.
Your Trading Profits/Losses = (Closing Price – Opening Price) x stake per penny
(561.0p – 544.7p) x £5 per penny
16.3p x £5 per penny
Your Trading Profits/Losses = £81.50 profit
 
Situation 2 HSBC falls and the spread betting market adjusts and moves to 525.6p – 526.4p.
Close and Restrict Your Loss? At this point, you may choose to leave your trade open or close it, i.e. close your spread bet and limit your loss. In this instance you choose to settle your position by selling the market at 525.6p.
Your Trading Profits/Losses = (Closing Price – Opening Price) x stake per penny
(525.6p – 544.7p) x £5 per penny
-19.1p x £5 per penny
Your Trading Profits/Losses = -£95.50 loss


Fully Worked Financial Spread Betting Example | Taking a Bearish View of HSBC

Spread betting on the UK equity to decrease in value

You Now Work Out Whether to Buy or Sell HSBC to push:

  arrow_upward  Above 544.7p? or
  arrow_downward  Below 543.9p?

Let’s Say You Choose to Go Short  arrow_downward  Below 543.9p
You Decide Your Stake, Let’s Assume You Opt For £10 per penny
So Now What Happens?
  • You will lose £10 for every penny HSBC rises higher than 543.9p
  • You make a profit of £10 for every penny HSBC goes lower than 543.9p
If You Are Spread Betting on a Market to Go Down Your Trading Profits/Losses = (Opening Price – Closing Price) x stake per penny
 
Situation 3 HSBC goes lower and the HSBC market is revised to 532.5p – 533.3p.
Take a Profit? You can choose to keep your bet open or close it, i.e. close your spread bet to lock in your profit. For this example, you do choose to close your bet by buying the market at 533.3p.
Your Trading Profits/Losses = (Opening Price – Closing Price) x stake per penny
(543.9p – 533.3p) x £10 per penny
10.6p x £10 per penny
Your Trading Profits/Losses = £106.00 profit
 
Situation 4 HSBC increases and the financial spread betting market is revised and changes to 555.5p – 556.3p.
Close and Limit the Loss?You could opt to let your bet run or close it, i.e. close your trade and limit your loss. For this example, you decide to close your position by buying at 556.3p.
Your P&L = (Opening Price – Closing Price) x stake per penny
(543.9p – 556.3p) x £10 per penny
-12.4p x £10 per penny
Your P&L = -£124.00 loss


HSBC Notes:

  • Price as per FinancialSpreads, 2 November 2011
  • Many spread betting companies will also let you speculate on HSBC in euros/penny and dollars/penny


UK Shares Spread Betting Guides

Individual shares spread betting guides with worked trading examples:
  • FTSE 100 Shares
  • US Shares (Dow Jones)
  • US Shares (S&P 500)
  • US Shares (NASDAQ 100)
  • Australian Shares
  • Danish Shares
  • Dutch Shares
  • French Shares
  • German Shares
  • Irish Shares
  • Norwegian Shares
  • Swedish Shares

Shares and Leverage

There are a couple of crucial differences between spread betting and trading traditional stocks and shares. As mentioned above, a key difference is leverage.

If you have £500 in an ordinary share trading account with a broker, you can only trade shares to the value of £500. However, given that spread betting is a leveraged form of trading, you can control of a much larger investment than your deposit.

The leverage with shares is normally around 100:1, which means that with a £500 deposit you can have a trade with worth £50,000.

Let’s say you buy the Barclays spread betting market and the Barclays share price increases by 1% then your profit would be 1% of £50,000 = £500, in other words, you would have doubled your initial deposit.

In layman’s terms, the leverage magnifies your profits. However it also magnifies your losses.

So should the Barclays share price drop by 0.5% then your loss would be 0.5% of £50,000 = £250, ie you would lose half of your deposit even though the shares only moved 0.5%.

Shares and Risk Management

Fortunately, there is a way to limit your risks: a guaranteed stop loss.

If you add a guaranteed stop loss to your trade then your trade will be closed if the market moves against your position and passes the level of your guaranteed stop loss.

Guaranteed stop losses need thought though. If you set a guaranteed stop loss that is too close to your trade then even if the market makes the slightest movement in the wrong direction your trade will be closed. Numerous small losses like this can quickly eat up your profits.

If you set your guaranteed stop loss too far from your trade then you expose yourself to a higher risk.

Nevertheless whilst adding a guaranteed stop loss to your trade normally comes with a small fee, only your losses are limited. A guaranteed stop loss doesn’t put a limit on your profits.

A Primary Cost of Spread Betting on Shares

If you open and close a trade on the same day, then normally your only cost will be the spread, ie the difference between the buying and selling price of the instrument.

If you keep a ‘long’ trade open overnight, the spread betting company will charge you an overnight financing fee. On a daily basis this fee is small, however it can make a significant difference if you plan on longer term trading.

With ‘short’ trades, ie trades where you have bet on the market to go down, your account will normally see a small credit when you keep your trades open overnight.

Tax Free* Share Trading

As well as being fast and convenient, shares spread betting is also tax free*. There is no capital gains tax, no income tax and no stamp duty.

Spread Betting and Dividends

With shares spread betting, if you’ve bought a market and the share in question goes ‘ex-dividend’ then your spread betting account will usually be credited with a percentage of any dividends declared. This percentage differs between spread betting companies.

If you’ve sold the market and the share goes ‘ex-dividend’ then your account will usually be debited with a percentage of any dividends declared.


AuthorAlex Turner

Senior Editor, SpreadBetMagazine