City Index Spread Betting - What's on offer online -:

Corporate History

City Index has been around for nearly 25 years (established in 1983) and offers a good range of spread betting opportunities across a large number of markets. They have been on the internet for over 5 years now, but still permit small trades by telephone.

City Index is a leading provider of CFD, foreign exchange, options and, in the UK, spread betting services. The Group trades primarily under the City Index, Finspreads and IFX brands and also provides a fully outsourced white label solution to numerous partners.

In September 2006, City Index acquired IFX Group plc ('IFX'), the London-based international business which provides institutional and retail clients with a range of innovative leveraged financial products, principally in the foreign exchange and global equity markets. The offer valued IFX at approximately GBP57.9 million.

City Index was established in 1983 and its ultimate parent company is IPGL, a private holding company. IPGL's other interests include an indirect shareholding of approximately 20 per cent. in ICAP plc, the FTSE 100 listed interdealer broker with a market capitalisation of approximately GBP4.3 billion, of which Michael Spencer is a director and Chief Executive Officer.

General Points (we will strive to keep this review up-to-date)

1. Two types of accounts are offered; the limited risk account and a deposit account. A limited risk account only allows trading in larger-cap UK, US and European shares only, plus major global indices but the amount you can lose is limited to the amount in your account (funds to cover all potential losses must be deposited before a trade is accepted) and trades will be automatically opened with a guaranteed stop-loss order set at the company’s minimum stop-loss distance. The deposit account is suitable for those of you with dealing experience as it gives you access to all the markets and benefits available.
2. A trading simulator allows users to get the hand of spread bets without risking real money. This is decent enough to get used to their platform but remember it's nothing like spread betting using real money.
3. Newsflow, research and charting services are available and there is a telephone dealing desk for those who want it.
4. Rolling trades are automatically closed at the end of the trading day and may then be re-opened (crystallising any profit or loss for the day). You are not able to trade ‘Rolling trades’ without them rolling on a daily basis. You are however able to trade Futures which expire quarterly, these you can then roll into the next quarter at a more favourable price.
5. Stop and limit orders can be stipulated to be triggered either in terms of the spread betting quote or the underlying market.
6. City Index has integrated its sister company Binexx into the existing City Index trading platform.
7. A few months ago IFX has been bought by City Index Ltd and they have started streamlining certain back office and middle office divisions.
8. Debit or credit transactions are accepted. Payments can be made via Switch, Delta, Mastercard and Visa (although there is a 1.5 per cent commission charge on the latter pair).
9. Mobile dealing services are freely provided. Note that the cost of getting a getting a data subscription can be expensive on some networks - but T-mobile, for example, offers unlimited data downloads for GBP7.50 a month.
10. Free seminars are available throughout the year. Attend one and you'll get a free £25 per point vodafone bet.
11. City Index offers separate discretionary portfolio management services for trading US stocks or major currency pairs (USD/CHF, USD/JPY, EUR/USD). For a minimum investment of £10,000, City Index Advisory will trade in and out of US stocks that make up the Dow Jones index on behalf of the client. A forex managed account requires a minimum investment of $50,000. For both the forex and stock managed accounts losses are limited to the value of the initial funds invested but charges are quite high. City Index takes 25 per cent of any net new profits – that is, profits in excess of previous highs – made on each investor's account on a monthly basis.

Differences between the City Index Deposit and Limited Risk Accounts

Good Points

1. Navigation is simple although it seems that over the years every new version of their trading platform becomes a little less customer friendly than the previous one.
2. City Index send out an excellent start pack with full info on all their products (available to request from our Free Brochures section).
3. Very wide choice of markets, though better commodity range found elsewhere.
4. City Index have an execution policy that says with a few exceptions everything below 'their size*' goes straight through at the price you see on the screen.
5. City Index are one of the cheapest for controlled risk trades, with the premium for a guaranteed stop of just 1 pip.
6. Offers spreads on the iShares market (margin is 10%). Spreads are also available on the China, Japan, Korea and Taiwan markets.
7. CityIndex sends you a daily statement that I rarely look at however they also send you a monthly statement that summarizes all the various interests - much easier than doing it daily.
8. Interest: City Index offers Libor minus 1 per cent over £50k.
9. City is an extremely well managed company with obvious connections in the city; this is so that an increasing number of stockbrokers are signing up to use it as the basis of their own client CFD/spread betting service. Offshoots include Barclays Spreadbetting, Hargreaves Lansdown Spread Betting and TD Waterhouse.

Bad Points

1. Not a good place to start as online and telephone minimums are £3 per point.
2. No trading in Small Cap Stocks (UK stocks must have a market capitalization of £50 million or more).
3. Not the best for FTSE100 futures.
4. Very strict account opening here at CityIndex.
5. Reports of occasional downtimes – ‘telephone trades only right now’.
6. City Index have a 2 point rolling cash FTSE spread, offer OCO and If Done orders, and endeavour to always be 1 point either side of the underlying cash price from 0800 onwards (according to their salesman). They also deal in .10 point increments. However, if you want to close the trade at 1630, you have to call them or close it online. Otherwise it is rolled over. This is the only aspect they seem to be lacking in, in terms of functionality. If you have a job, you don't want the hassle of having to phone them every day telling them not to roll a bet over.

Verdict: City Index has a minimum £3 per point stake means they only really welcome more experienced punters. The CityIndex platform is probably more user friendly than the IG one but both do the same thing. The charts are pretty much identical, except CityIndex has tick by tick through to weekly loaded every time. For IG you have to go to the advanced charting function to load greater than daily.

However CityIndex lacks a few indicators that IG has (volume for example). Both tend to suffer from spurious spikes that throw the entire scale out making any interpretation intolerable. Interest rates are lower than IG (2% above RBA compared to 2.5%), however GSLOs at 1 pip are more restrictive than IG.

Visit City Index by clicking here

Please note that here we are only giving an account of our experiences and readers comments/contributions, please do not take this as advice to open/close/avoid any firms - your experience might be different! Send us your comments by filling in the form below.

Comments	Date
By Phil Lacey	2008-04-18 05:28:35
CI Trading simulator is hopeless. They keep saying it will be updated. It also drops out with misconnections or Tech problems. Is this what its like to deal with CI?

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