FTSE Futures and Market Trading Times

Q. Where's a good place to look at the futures?


A: IG Index's homepage gives FTSE's futures prices, just check where it says live prices, you can even trade the FTSE out of hours just with a bigger spread!

Q. Do I profit for each point that the FTSE moves or every full % point?

Suppose I short the FTSE 100 tomorrow, when I bet so much per point, say £10 per point, does that mean every movement is £10, (i.e. 6500 to 6450, is that 50 points) or every full % is 1 point?

So if I bet £10 per point on nrk at £2.20, and it fell to £2.10, I'd profit £100 minus the spread??

And if I bet £10 per point on the ftse, and it fell 60 (about 1%) I'd profit just £10 minus spread, hence needing to bet more ideally? Or am I wrong?

And if I set my bets for daily, I can close any time I like, or does it just close at end of day?

A: £10 per point on the FTSE, DOW etc, would be per whole point. If it dropped 50pts you'd be £500 up (not quite £500 profit due to the spread).

You can open a daily trade or a futures (forward quarters). These are priced differently and have wider spreads. Quarter periods are from 19th of March, June, September and December.

When it comes to stocks (shares) the point is the penny, not the sub 1p decimal values, though the decimal places are included in the price (if you bet £10pt on a share price and the price moves up .25p then you're £2.50 up.

Daily trades normally expire when the market closes but you have the option of rolling the bet over to the next day for a very small cost. The same is true with the futures. You could sell AL. (not advice) on a December contract, then before the 19th December expiry, roll the bet to the following quarter (19th March). This usually costs about half of the spread.

It's wise to use stops and for an additional fee some companies will allow guaranteed stops. With a guaranteed stop loss you can't lose more than your stake. If the price gaps past your stop pre-open then the extra loss is the SB company's...not yours.

Limits can also be useful -

Say you're short PAG at 280. You think it might drop to 250 but only briefly before rising again and you could miss it. So you set a limit at 250 or just above so that if it hits your trade you would close for that profit...even if it was only that low for minute.

With a spreadbet, to go long you 'buy' and to close that trade you 'sell'.

To go short you open with a 'sell' and close with a 'buy'.

Be very careful with spreadbets...they're a fast way to make and lose money. Use stops and don't allow a position to run too far against you.

It's always a good idea to find companies which are good shorting candidates so that not all your positions are long. Being long only is always risky in case of a downturn in the markets.

Q. The FTSE futures do not expire everyday right?

I've been trading the FTSE Daily Cash, now my trades expire at 4.30pm everyday, I've been looking at the future dates on the FTSE, but I have not traded them yet, am I right in thinking that these would not expire daily as the daily cash does and would run until the displayed future date? i.e. I could stay short for a 3 month period for example.

A: Correct. You can roll it over at expiry if you want too. It just costs more to have those longer-dated contracts. Also, it takes up more margin.

Q. How can an index continue to fall or rise if the market is closed? I want to bet on real events/news!

I have been spread betting on FTSE and Dow daily during trading hours only because what might be a stupid question, How can any index continue to fall or rise and by therefore by definition people trade if the market is closed? I want to bet on real events/news. Would love a non techy answer. Thanks, P Weide

A: I have been asked the same question a few times! Basically, prices move in conjunction with other world markets out-of-hours. FTSE futures trade between 8am to 9pm and outside of these hours the companies can price the FTSE from movements in the Dow futures and other world markets. Because all markets are interrelated, a movement in the price of oil, or the Dow, for example, will have an impact on the price of the FTSE out-of-hours. Dow futures for example will trade nearly 24 hours a day (closing just between 21:15 to 21:30) and will obviously move with the cash market during trading hours. Outside of daily trading hours it will move as a basis of world markets (Nikkei, Hang Seng, etc) and other events that may have an effect.

Many companies release data before and after market hours and this will therefore also have an effect on the futures price. The price of the rolling market is devised from a 'fair value' off the futures price. Therefore, you truly are trading off real events as any major news will have an immediate effect on the market - no matter what time that news is released. The futures market of Dow and FTSE is actually a much more liquid (heavily traded) market than the cash market equivalent,therefore the rolling price is actually taken basis the future market.

 ...Continues here - Questions about Margin Requirements

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