If you wanted to place a financial spread bet on the FTSE 100 with Spreadex, you would trade on
an instrument known as the UK 100. This is the most heavily traded product by Spreadex members
as anyone who keeps themselves up to date with market news can use their knowledge to place spread
bets on this index to try and turn a profit.
The FTSE 100 Index (UK 100, Daily) is made up from the 100 most highly captialised markets
on the London Stock Exchange (LSE). It is a joint venture between the Financial Times and
the London Stock Exchange and was created in 1984. The companies listed represent over 80%
of the total capitalisation on the stock exchange. Some of the companies listed include HSBC,
Royal Dutch Shell, BP and Vodafone.
The Index can be volatile, with movements of over 100 points during the course of the day occurring
frequently. If you get your spread bet right, the rewards can be huge.
Spreadex offers a UK 100, Daily contract as well as different future contracts. These contracts will
offer a spread on the UK 100 of, for example, 5,698-5,700. If you think the price will end up being
higher than our spread at the contract’s expiry period, you can buy at the ‘offer’ or ‘ask’ price
(the higher part of the spread). If you believe the price will end up being lower, you can place a trade
to sell at the ‘bid’ (lower part of the spread).
If your trade is successful you will win the points difference multiplied by your stake. If your trade
is unsuccessful you will lose the points difference multiplied by your stake.
For example, if you placed a £1 buy trade on the Spreadex UK 100, Daily product on a spread of 5,274 - 5,276
and then closed out at 5,400 you would win £124 (5,400 - 5,276 = 124; 124 x £1 = £124). But if the trade
ended at 5,200 you would lose £76 (5,200 - 5,276 = -76; -76 x £1 = -£76).