How to spread bet on the FTSE 100

Spread betting on the FTSE 100: the need to knows

What is the FTSE 100?

The FTSE 100 is a stock index of the 100 largest companies in terms of market capitalisation that are listed on the London Stock Exchange (LSE). The FTSE 100 is one of the most well-known and well-traded indices in the world, so much so that some financial experts see it as a frequent barometer of UK economic health.

What is spread betting on the FTSE 100?

Spread betting on the FTSE 100 means that you're using spread bets - which are a financial derivative - to take a position on the price of the FTSE 100 rising or falling. You'd 'buy' with spread bets if you think the price will rise, and you'd 'sell' if you think the price will fall.

When you spread bet, you stake an amount of money per point the FTSE 100 moves. For example, if you staked £100 per point you’d win £500 if the FTSE 100 moved five points in your favour, or lose £500 points if it moved five points against you.

Since spread bets are leveraged, it’s important that you take steps to manage your risk because leverage can increase both your profits and your losses. Remember to carry out your own analysis – both fundamental and technical – before you spread bet on the FTSE 100.

Spread betting is one way to trade the FTSE 100. Find out everything you need to know about trading or investing in the FTSE or learn about trading FTSE 100 CFDs.

7 steps to spread betting on the FTSE 100

1. Choose your timeframe and open an account
2. Analyse the FTSE 100 price and charts
3. Choose whether to buy or sell
4. Pick your position size
5. Set your stops and limits
6. Place your trade
7. Monitor the market and close your trade

Choose your timeframe and open an account

There are different timeframes that are better-suited to different trading styles.

For example, traders that are looking to take short-term position might prefer day trading or scalping – which look to earn small profits from multiple positions that are opened and closed within a short timeframe. These positions aren’t usually left open overnight.

For traders looking to take a long-term position, swing trading might be a better style. That’s because swing traders seek to profit from a larger overall trend, sometimes on weekly or even monthly timeframes. These positions can be left open overnight to benefit from the full scale of the trend’s movement.

Shorter term traders may wish to spread bet on our FTSE 100 ‘cash’ market, while longer term traders may wish to deal in FTSE 100 ‘futures’. This is because overnight funding is charged on daily funded bets (the FTSE 100 ‘cash’ market), which means longer term investors may prefer to deal in futures to avoid overnight funding charges.

Also, the cash market tends to have tighter spreads (meaning it's suitable for more frequent trades in smaller denominations), making it short term friendly, while futures have wider spreads.

We invented financial spread betting in 1974, and today we offer you over 17,000 markets on the UK's number one trading platform.* Open an account to get started, or find out more about our spread betting platform.

Analyse the FTSE 100 price and charts

Carrying out your own analysis can be the difference between making a profit or incurring a loss when you’re spread betting on the FTSE 100.

• Technical analysis looks at chart patterns, technical indicators and historical price action to attempt to predict what the FTSE 100’s price movements might do in the future.

  Learn more about technical analysis here

• Fundamental analysis is based on fundamental economic metrics, like government interest rates, the UK’s gross domestic product (GDP) and other macroeconomic factors that might cause the FTSE 100 to rise or fall in value.

  Learn more about fundamental analysis here

Our trading signals can also help you spot potential trades that analyses don’t always pick up, as well as our free trading alerts, which will send you free, customisable notifications to alert you to market movements.

Choose whether to buy or sell

You’d ‘buy’ (go long) when you’re spread betting on the FTSE 100 if you think that the price will rise and you’d ‘sell’ (go short) if you think the price of the FTSE 100 will fall.

Again, analysis and information are a trader’s best friend, as prices may rise or fall based on a number of factors, such as macroeconomic headwinds, good or bad news in large companies on the index and current market conditions.

Pick your position size

Once you’ve decided to spread bet on the FTSE 100, you need to choose your position size – which is the amount of money you are staking for every point the FTSE 100 moves. So, if you stake £10 per point, you’d gain £100 if the FTSE 100’s price moves 10 points in your favour and lose £100 if it moves 10 points against you.

Because spread bets are leveraged, you only have to put up a deposit to open a position (called margin). Trading on margin enables you to get exposure to the full value of the trade without committing a higher value upfront. While this can magnify possible profits, it will also amplify your losses.

On the FTSE 100, the minimum bet size is 50p, with a minimum margin requirement of 5%. So, if you stake £10 at 6,600 points, your margin – the amount you need to open the position – is £3,300.

(£10 x 6,600) x 5% = £3,300

Set your stops and limits

• Set a stop order to close (stop) your position when the market moves against you by a specified amount. This means you limit the amount you can lose

• You can also set a limit order to close your position when the market moves in your favour by a specified amount. This means you choose how much profit you gain when you exit

You can also use limit orders to help lock in profits by setting them to close your position at a level that’s higher than the current market price when going long, or lower than the current market price when going short.

It is important to note that, even with stop limits and stop losses in place, a phenomenon called ‘negative slippage’ can occur. This is when, as you place your order, the market suddenly moves and the stop you have set can’t be processed quickly enough, and your order is filled at a worse price than expected.

Our platform has specific execution logic that ensures you’re more likely to experience positive slippage than negative slippage, but it can still happen. This can be avoided by attaching a guaranteed stop to your trade. Unlike basic stop losses, a guaranteed stop will always fill your trade at the price at which you have set it. However, you’ll pay a small premium for it.

Place your trade

When you have added your stop and limit amounts to the deal ticket, click ‘place deal’ to place your trade. Once you have seen the ‘deal confirmed’ notification pop up, your spread betting position is open and tracking the FTSE 100.

Create a live account and begin trading now

Monitor the market and close your trade

If you want to take a profit or prevent further losses, you may decide that it’s time to close your trade. Click on ‘positions’ on the left-hand side of the platform and select ‘close’. Your profit or loss will be calculated based on the price of the FTSE 100 when you clicked ‘close’.

To help you monitor the market, with our award-winning platform,* you’ll have access to current market news and expert analysis on trends and movements. Plus, you can use tools like our free trading signals and alerts to stay up to date with marketing conditions for your set parameters.

FAQs

Can I spread bet on other FTSE markets?

Yes. The FTSE 100 tracks the 100 biggest companies on the FTSE by market cap, but there is also the FTSE 250 (the 101st to 350th biggest) and also a range of FTSE 350 sectors like banks, oil, gas, travel and leisure to trade with us.

What are the costs of spread betting on the FTSE 100?

The main costs of spread betting on the FTSE 100 are your spread and overnight fees, which are calculated based on trade size, market closing price, nights held and an admin fee of 2.5%.

How do I get started with FTSE 100 spread betting?

To get started with FTSE 100 spread betting, you’ll need to create either a live or demo account. A live account will let you jump right in to spread betting on the FTSE 100, while a demo account will let you build your confidence in a risk-free environment until you’re ready to trade for real.

What times can I trade the FTSE 100?

When spread betting, you can trade the FTSE 100 non-stop from 11.02pm Sunday to 10pm Friday.

We also offer a Weekend FTSE 100 market – which is separate to our weekday market – and is available to trade from 8am Saturday to 10.40pm Sunday. Any weekend positions that you leave open past 10.40pm on a Sunday will automatically roll over to the main FTSE 100 market. However, positions in the main market on Friday won’t roll into the weekend market.

Spread betting on the FTSE 100 summed up

• The FTSE 100 is a well-known and popular index to trade for both beginner traders and professionals
• With us, you can spread bet on the FTSE 100 – thousands of traders do every day
• As spread bets are leveraged, you are only required to put up a small margin upfront, approximately 5% of your position’s size. This means your profits and losses can far outweight your initial margin amount
• You can also go long or short with spread bets, for added flexibility whatever the market is doing
• You can put stop losses and limits in place to minimize any potential losses when spread betting the FTSE 100. To prevent against losses when volatility causes slippage, you can use guaranteed stops for a small fee

Ready to get started? Open an account today

Footnote

* As awarded at ADVFN International Financial Awards 2021