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 - in fact Spreadex is one of the few that still offer significant amounts of leverage. Reason I spread bet via phone is that not all companies traded are shown on the website. I have rarely if ever heard/read a bad word about Spreadex. The range of markets and products offered are good and the spreads are quite competitive as well.
One downside is that the platform can be slow and prone to dropped connections. Apart from that the platform itself is quite easy-to-use with decent spreads although I found it has lack of one important feature: the ability to place a stop loss when you set an order. You need to open a position in order to set the limit and the stop. Another 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...
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.
Financing is calculated as (2.5% + 1 month libor)/365 for UK (360 days for EU and US) per night. Note that daily rolling trades at Spreadex close and re-open each day realising any profit or loss in the process. 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, they reopen your short each night at exactly the same price it was closed at, so no charge is applied. Moreover, Spreadex will pay interest on accounts at 10% p.a. on balances which are held on the deposit ledger for a full calendar month however in order to qualify for this your opening stakes must total 3% of your deposit ledger in each calendar month in financials and 5% in sports trades.
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. The spreads don't widen out of hours although 24-hour trading is not offered. 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 well as financial spread trading, Spreadex also takes bets on sporting events - 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. Range of markets is limited though and not all games are offered in-running.
Want more? Our interview with Andy Mackenzie of Spreadex is available here.
If you are located in the UK you can request a free no obligations brochure from some leading spread betting companies and the products and services they offer by clicking here
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.
Read and Write Customer Reviews about Spreadex here
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