The FTSE 100 is one of the most popular financial spread betting markets. By correctly predicting whether the index of the UK’s leading one hundred companies will rise or fall you can potentially make some good profits.
But how do spread betting FTSE accounts work? And what should you look for when comparing FTSE 100 spread betting companies? We explain.
How financial spread betting FTSE 100 works
The FTSE 100 is the index of the top 100 companies in the UK. As the values of the shares of the individual companies rise and fall, so does the FTSE 100 index itself.
If you're new to financial spread betting it's likely you're wondering just how to spread bet FTSE 100 fluctuations.
Essentially you have to correctly predict whether the value of the FTSE 100 will rise or fall.
If you believe it will rise then you ‘buy’ the value of the index and make a profit for every point that the FTSE 100 rises above your ’buy’ price. For example, let’s say you buy’ the FTSE 100 at a value of 5000 for £10 per point. If the FTSE 100 rises to 5025 at the end of the day, you can close your bet with a profit of £250 (25 x £10).
However, if the FTSE 100 had fallen to 4970 over the course of the day, if you closed your bet you would have lost £300 (30 x £10).
You can also profit by correctly predicting falls in the stock market.
By selling a spread bet FTSE 100 you will make money if you’re right and the value of the index falls.
What to look for when you compare spread betting accounts
In order to place a spread bet on the FTSE 100 you need to open a financial spread betting account. Before you do so, however, you should compare spread betting accounts to see which offer the best benefits to you.
When you compare spread betting accounts you should check:
Whether spread betting FTSE 100 is possible
- What the spread is – the difference between the ‘buy’ and ‘sell’ price on their FTSE 100 spreads
- What the minimum margin requirement is - you use this to work out the size of the minimum bet that's accepted
- Whether a guaranteed stop loss is applied and if so at what level this kicks in
- Whether mobile, online or virtual trading is available
Only once you have this information will you be able to choose the best FTSE 100 spread betting companies for your needs.