Spreadex is my financial spread betting company of choice for telephone trading. They spreadbet virtually any security with a market cap of £1m+ and the margins are competitive (All FTSE100 shares at 5% margin) - in fact Spreadex is one of the few that still offer significant amounts of leverage. Most shares can be built upon request (give them a call if in doubt) as long as they are of a certain market capitalisation and all are now tradable online including most small cap market makers. I have rarely if ever heard/read a bad word about Spreadex. The range of markets and products offered are good and the spreads (which are fixed) are quite competitive as well. Mobile trading is also supported - in fact Spreadex offer both an iPhone app and an Android one so this should cover most devices. On the downside no demo account is offered.
In the past the platform used to be prone to dropped connections but Spreadex have now launched a new platform and this should hopefully be a thing of the past. The new platform is HTML5 based apart from the charting on desktop which is powered by IT Finance at the moment but which we are told will soon become proprietary. The trading platform itself is quite easy-to-use with decent spreads and with the revamped platform you can even add stops and limits to orders. One nice thing about the new platform is the ability to customise the trading platform layout by simple 'drag and drop' functionality which makes it very easy to move charts, orders, trade tickets, watchlists and particular markets wherever you want them on the screen. Clients can even customise what information is displayed in the 'open positions' screen for even better control. The next time you log onto the platform all your settings will be restored as per the last visit to restore the your preferred layout. The platform now also supports the ability to switch on one-click dealing for those traders that want to execute their trading more quickly. One thing that I found confusing was the way the system closes positions when the stop loss is triggered. It takes a couple of minutes before the actual position is taken from your open position page, which makes you think it is still open... Having asked a Spreadex dealer directly, he replied that with shares they have to take additional time to ascertain that stops have indeed triggered and at what level so incorrect stops are not filled.
How many financial markets are covered at Spreadex? If you include the quarterly contracts it would be several thousand. In addition to indices and commodities, they offer a wide range of UK and US equities, including small caps. They regularly add new markets and clients are encouraged to contact the Dealing Desk if there are any markets they would like Spreadex to offer. Novelty markets include Politics, TV (Eurovision, X Factor, Sports Personality of the Year etc...)
Spreadex accept deposits by debit and credit cards, Skrill, online bank transfer and wire transfer. Spreadex does not charge for making payments using a UK debit card or for making bank transfers into your account. There is, however, a 2% administration fee for all credit card payments and CHAPS same-day transfers are subject to a £25 charge. There is also a 2.5% flat fee on all card transactions that are not in sterling.
Stops and limit orders at Spreadex are triggered when their bid or offer price hits the specific level. The price includes their spread so for example if you were trading the FTSE DEC and the market price is 5283 - 5283.5, Spreadex's price would be 5281 - 5285, if your stop level was 5281 it would trigger when Spreadex's price touched it. No trailing stops are offered presently. Spreadex offer guaranteed stops on major markets, so most indices, FTSE 350 companies, bonds, gold, oil and major currencies would be covered.
Financing is calculated as (3% + 1 month libor)/365 for UK equities (360 days for EU and US) while for spot currencies this is calculated as the interest rate differential plus 2%. Indices have a fixed rate, which are mentioned on the information page next to each instrument. Monthly and quarterly contracts have no separate costs. For rolling daily trades the roll charge/dividends/short borrow charge are debited/credited but the P&L is only realised when the position is closed. You can buy as many times as you want in the same contract, however if you wish to go short you will have to open a contract with a different expiry date as otherwise it would close out one of your longs rather than open a short position.
It is interesting to note that Spreadex do not (presently) charge on short positions if the interest rates are below LIBOR - which is the case now. Generally spread betting firms pay libor minus 2.5% on short positions but as libor is roughly .5% most spread betting providers have started charging around 2%/365 per day. The way it works at Spreadex at the moment is that if you are short a stock, trades are held continuously and not closed/reopened each night while charges are debited/credited separately. A short borrow charge may also apply which is however dependent upon the stock.
Spreadex quote the FTSE, Dow and Dax daily contracts out-of-hours; they do this based on their future counterparts which are open and which they use to price all Index daily contracts. 24 hour trading is now offered on all indices/currencies/commodities, spreads are at their narrowest during market hours then widen. They are at their widest between 9pm and 7am, UK Indices/Shares are rolled at 4.30pm, Currencies at 8pm and Commodities and US Indices/Shares at 9pm. The company has also recently introduced a range of spread bets on exchange traded funds (ETFs) and added several new daily futures markets to its current range of spreadbets. The advantage with exchange traded fund bets is that it allows clients to take positions over a basket of shares, commodities or bonds as opposed to individual stocks which can help smooth out short-term market volatility – with prices based on an expiry that can be months or years ahead.
Spread-Ex also give credit - if you open an account they will initially give you a credit ranging from £500 up to £2000, but, at the end of the day whether or not you fund the account, if you lose, they still want the dosh pretty quickly. To access credit beyond these limits Spreadex will require proof of funds in a bank account or portfolio or shares - wealthy clients have credit limits of up to £50,000. Note that account at Spreadex can be denominated in € or USD besides £
As far as education goes Spreadex offer examples, beginner hints, guides on risk, a video training centre, market updates, interviews, economic diary, charting guides and economic indicator explanations. Their financial desk is also well manned with experienced staff and are good to speak to.
As well as financial spread trading, Spreadex also takes bets on sporting events - Spreadex is in fact the only provider to offer financial spread betting, sports spread betting and sports fixed odds betting from the convenience of one account. Albeit be warned that they will limit you if you start winning a lot in sports, on the positive side they usually offer more competitive lines than Sporting Index so good for getting value. For sports spread bets, the fixed odds spreads can either be displayed either in the traditional fixed odds way or as two-way spreads (whereby a client can place a bet either against or for an event to occur with spreads settling at either 100 if the said event happens or at 0 if otherwise). Range of markets is limited though and not all games are offered in-running.
Sign-up Offers: For financials Spreadex offer a 5% bonus offer on UK 100 winnings, and the iPad offer is available on sports (or up to £400 worth of sports spread bets). These offers are available if you sign up using this link.
Verdict: Each of the spread betting companies has different areas of focus; Spreadex may not be the cheapest in pricing terms, as they are probably closest to IG. Spreadex covers certain smaller stocks than others, but somehow connectivity issues can be a problem. What Spreadex offers clients is a more flexible and bespoke service, credit and access to greater gearing (lower NTRs). If these are what you are seeking, then Spreadex can help you.
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.
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