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Spread betting and CFD trading on the major indices is risky. Which brokers are best and regulated by the FCA?
Second only to spread betting on FX, indices offer good liquidity, a decent intra-day range and pretty much 24 hour news flow.
The constant release of economic figures and leading indicators from overseas markets make them one of the most popular asset classes to trade worldwide.
The major indices are:
The German DAX
This tracks the top 30 public companies in the Germany, has big tick size of EUR25 per point in the futures market and is the first market to open in Europe. This makes it a good indicator for the FTSE, and follows on from the US indices.
The UK FTSE
The FTSE covers the top 100 companies in the UK and is generally regarded as the benchmark for the UK economy. It’s a good index, for jobbing in and out of all day.
DOW and S&P
The DOW is based on the top 30 industrial stocks in the US whilst the S&P focuses on around 500 of the biggest public companies. The S&P is one of the most heavily traded assets worldwide.
The best brokers for DAX, FTSE and DOW/S&P
Generally, the best spread bet brokers will be the ones that offer the tightest spreads. You need tight spreads with index spread betting as traders like to take quick profits on short-term intra-day positions.
Here are some brokers and a quick summary of why they are good for index trading:
Saxo Capital Markets – min account size of £1,000 but excellent service and institutional pedigree.
Core Spreads – just really tight spreads
ETX Capital – good all round broker
Spreadex – slightly wider, but excellent phone brokerage support
IG – the biggest with good client sentiment driven data
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