Education centre

Spreadbetting is currently one of the most exciting methods available for speculating on the financial markets. In its most basic form, it is betting on the outcome of an event. Your spreadbetting broker will forecast the outcome of the event and you bet on whether the actual outcome will be higher or lower than their forecast.

‘Contracts for Difference’, or CFDs, are another type of financial instrument that allow you, the investor, to speculate on movements in the financial markets. Spreadbetting and CFDs both take advantage of ‘leveraging’ or ‘trading on margin’ - both require that you only put down a small deposit on the value of the underlying trade.

The most commonly traded CFDs and spreadbets are typically those relating to the stock markets and their indices – although there are a vast range of currencies, commodities and other markets available.

In the following series of video clips, Tom Hougaard of City Index explains the principal benefits of spreadbetting and trading CFDs:

1. Spreadbetting – Key benefits Tax advantages. No stamp duty. Go long or short. Instant execution. Small trade sizes. Global market coverage.	download
2. Spreadbetting – How does it work? Marks & Spencer – a worked example. Spreads. Buying. Selling. Closing a bet. Margins.	download
3. Spreadbetting – What can you trade? UK, US, European or Asian equities. Stock Indices. Currency pairs. Commodities. Options.	download
4. Spreadbetting – Trading the currency markets Currency or foreign exchange – the biggest market in the world! A worked example. Selling short - £ against $.	download
5. Spreadbetting – Going 'short' on the stockmarket Selling 'short' or 'going short' means selling stock that you believe will fall in value. A worked example of ‘shorting’ Vodafone.	download
6. Trading CFDs – Key benefits Trade 'long' or 'short'. Fully interactive trading platforms. No stamp duty. Cheap trading rates. Trade on margin. Excellent global market coverage.	download
7. Trading CFDs – A worked example Trading CFDs vs shares - a worked example. Margin required. Stamp duty. Commission. Nightly financing costs.	download
8. Trading CFDs – Margin trading requirements Margin requirements for stocks, indices, currencies. How does it work? Initial margin. Variation margin.	download
9. Trading CFDs – What can you trade? UK, US, European and Asian stocks. Global indices. Currency pairs. Commodities – e.g. gold and silver. Sub-sectors.	download
10. City Index – The trading platform Internet based – no software downloads. Real-time information. Streaming live prices. Charting & research. Limit & stop orders.	download
11. City index – Training seminars Did you know that CFD trading is not charged stamp duty? Allows trading on margin? And covers the global markets?	download
12. Binary Betting – Key benefits Spread betting? CFD trading? Or binary betting – a new product for fast paced market action. High volatility. Controlled risk.	download