Tightest Spreads in Online Spread Betting

By mosesbet · Filed Under Spread Betting Comments Off on Tightest Spreads in Online Spread Betting 

Tightest Spreads in Online Spread Betting

The spread is the difference between the bid/offer (or sell/buy) price quoted by the broker.  When researching the top spread betting firms one of the first things that you should be looking for are razor sharp spreads.  The tighter the spread, the more money you can make from your trades (simple!) and the less market movement you’ll need to make a profit.

For example, let’s say that you want to open a position on the price of gold at Tradefair.com. A bid/offer of $1400 and $1405 might be quoted by the online trading platform.  This means that you can buy at $1405 or sell at $1400.  Notice that the difference between the two prices is 5 points, i.e. the spread is 5 points.

In order to make a profit trading on the gold price you’d need to see a positive movement of at least 6 points.  If you bought at $1405 and the sell price moved up 5 points from $1400 to $1405 than you’d only just break even.  However, if the index moves up 6 points or more than you’ll make a profit based on your opening stake size.

If you bet at £10 per point and closed your trade at $1406 than you’d make £10 profit.

What is the Size of the Spread?

The “Spread” of any underlying financial instrument is always determined in points.  The size of the spread varies between different markets.  For example, when trading commodities such as gold and silver you’ll normally see a spread of around 4-5 points.  However, when trading on indices such as the UK Rolling 100 Futures a lower spread of 1 point (possibly 2 points) is much more likely.

In order to find the exact size of the spread you can usually find the information either on the online trading platform itself or in the FAQ section of the actually spread betting websites (e.g. you can view all of Tradefair’s spread prices here).

Tradefair Spread Prices:

  • UK 100 Rolling Daily – 1 point
  • UK 100 Rolling Futures – 2 points
  • Wall Street Rolling Daily – 1 point
  • DAX Rolling Daily – 1 point
  • S&P Rolling Daily – 4 points
  • NASDAW Daily Futures – 2 points
  • Euro Dollar Interest Rate Futures – 2 points
  • Brent and US Crude Oil Futures – 5 points
  • Natural Gas Futures – 30 points
  • Gold Futures – 6 points
  • EUR/GPB – 1 point
  • GPB/USD – 2 points

Which Spread Betting Firm Offers the Tightest Spreads?

Obviously there’s a lot a competition between UK spread betting companies which has helped drive the average spread size down over the years.  You’ll find some excellent tight spreads starting from just 1 point across a range of markets such as the UK Rolling 100, Futures, FTSE 100, DAX, USD/EUR, EUR/GPB at sites such as Capital Spreads and City Index.

The “Zero Spreads” promotion at WorldSpreads is one of the most interesting offers for experienced traders.  If you apply for a Platinum Account at World Spreads now than you’ll be able to trade on a range of markets for free with no charges or spreads.  The Zero Spreads promotion is available on the UK 100, DAX, CAC, GILT, BUND, EUR/USD, AUD/USD, EUR/GPB, USD/JPY and more.  Sign up to WorldSpreads now for more information on their exclusive Platinum Account.  New customers will also receive a special £300 cash-back bonus!

City Index is also argued to offer some of the tightest spreads starting from 1 point and deposit margins from as little a 1%.

 

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