Spread betting ftse 100 index is one of the most popular indices for spread trading, and indeed is the most liquid of all the indices quoted on a daily basis. The popularity of this index is no doubt due partly to the fact that spread betting was conceived in the UK, where most of the current spread betting companies are still based, and partly because most spread betting clients live in the UK. Finally the FTSE 100 is the most widely quoted index around the world, sitting as it does at the centre of the trading world and representing the performance of some of the world’s largest companies at the London Stock Exchange.

This of course is just one index of many that will be offered by you spread betting company and all with be available as daily, rolling daily or futures contracts, with most spread betting companies offering the daily contract at a 1point or two point spread with a minimum £1 per point bet size. Spreads on other contracts such as the Wall Street daily, will generally be much wider due to their underlying volatility.

As with any market, you need to understand the instrument you are trading, and this is no different when spread betting ftse contracts, with many traders still thinking that the underlying market is the FTSE 100 cash market – this is simply not the case! The underlying market is the FTSE 100 futures market which is quoted every second, and is the one on which the spread betting companies base their spreads, as the market is updated every second, ( the cash market is every 15 seconds) and the futures market is open over a much longer period, allowing ftse 100 spreads to be quoted almost 24 hours a day. One other popular misconception amongs traders is that the FTSE 100 is a representation of the UK economy – it is NOT – just look at the companies in the index and where they earn their revenues, which will make the point! I have recently devoted an entire site to ftse betting, and if you are thinking of spread betting ftse 100 contracts, then I would urge you to have a read – it might make you think a little deeper before you rush in and open a bet!

Finally, one of my favourite spread betting strategies for indices in general, but the ftse 100 in particular is to hedge the contract with another correlating market, and for this I tend to use the ftse 100 and Wall Street. Where the US market leads, the UK market generally follows, so both indices will tend to follow once another and therefore correlate positively. As a result a long spread bet on one, will hedge a long spread bet on the other, and provided we have weighted our spread bets according to the gearing between the two markets, then we generally have a balanced hedging trade with a low risk profile. Provided one index moves more that the other, and in the direction of our market analysis, then we can profit from the move, with our risk protected with the second hedging index. A simply strategy for spread betting indices amd spread betting ftse 100 contratcs in particular.