Sector betting enables you to take a broader position on the direction of entire sectors such as oil, banks or miners, without having to take a position on the performance of an individual company within the sector. At City Index, we offer competitive futures spreads on more than 30 sectors including banks, miners, real estate, pharmaceuticals and more. Our sector markets are open to trade from 8.15am and our spreads start from just 0.4%.
Concerns over the UK economic recovery, has lead to volatility in the UK banks sector. Our Banks Dec 10 Spread is trading at 5062/5082.
You believe the banking sector will rise and decide to buy £5 a point at 5982 (our buy price).
In order to open the position you need to put down a margin of 12.5% of the notional value, which is 5982 x £5 per point x 12.5% = £3738.75.
Over the next few days, worries over the state of the UK economy have quietened. This leads to a rise in the banking sector. Our spread for banks has risen to 6002/6022.
You decide to close your position by selling £5 per point at 6002 (our sell price).
Result: This is a winning trade, resulting in you selling the trade 20 points higher giving you a £100 profit.
Alternative scenario: If the price had fallen to 5962, you would of lose £100 (5982 – 5962 x £5 per point).
You believe the banking sector will fall, and decide to sell £5 per point at 5962 (our sell price).
In order to open the position you need to put down a margin of 12.5% of the notional value, which is 5962 x £5 per point x 12.5% = £3163.75.
Over the next few days, the state of the UK economy has deteriorated due to growing fears of the length it will take to recover. This leads to a rise in the banking sector. Our spread for the sector has fallen to 5922/5942. You decide to close your position by buying £5 per point at 5942 (our buy price).
Result: This is a winning trade resulting in you buying out the trade at 20 points lower giving you a £100 profit.
Alternative scenario: If the price had risen to 5982, you would of lose £50 (5982 – 5962 x £5 per point).
Our superior trading platform is packed with resources to help you make better-informed spread betting decisions. Our resources tools include live news feeds from Thomson Reuters and Dow Jones Newswires and a superior charting package that is available free of cost to all City Index trading account holders. Our specialised webinars, held by our team of spread betting experts, enable you to learn spread betting at your own pace and from the comfort of your own home. Find out more about our webinars and seminars.
New City Index clients are also entitled to special minimum trade sizes starting from just 25 pence per point for a period of four weeks, so you can place your first spread bet with confidence. At the end of the four-week period, our normal spread betting rates will automatically be applied to your account. Find out more
Our range of trading platforms enable you to trade securely and at any time of the day. Our easy-to-use online trading platform lets you access live prices, while our cutting-edge iPhone™ Trading App City Trading™ lets you trade from wherever you are and at any time of the day. Spread betting and CFDs are leveraged products and can result in losses that could quickly exceed your initial outlay, so please make sure you fully understand the risks involved.
Spread betting, CFDs and Forex trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
*Spread betting and CFD trading are exempt from UK stamp duty. Spread betting is also exempt from UK Capital Gains Tax. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.
+Margin Factor is shown here as a guide only. For the current margin factor applicable to your position please refer to the Market Information on our Trading Platform.
†1 point spreads available on the FTSE 100, Wall Street, Germany 30, France 40 and Australia 200 during market hours on daily funded trades & daily future spread bets and CFDs (excluding futures).
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