Yes, indices are the most popular asset class with Spreadex’s predominantly UK-based clients as opposed to other brokers like Pepperstone where forex is more popular for international clients.
Spreadex Indices Trading Review
Name: Spreadex Indices Trading Review
Description: Spreadex offers 24 hour indices trading via financial spread betting or Contracts For Difference on the world’s major stock indices – with spreads on the most popular markets from 1pt on UK 100, 1pt on Germany 40 & 1.7pts on Wall Street.
72% of retail investor accounts lose money when trading CFDs with this provider.
Summary
- Indices available: 30
- Minimum deposit: £1
- Account types: CFDs, spread betting
- Index pricing: FTSE 1, DAX 1, Dow 4, NASDAQ 2, S&P 0.6
Pros
- Excellent customer service
- Low minimum deposit
- Easy-to-use index trading platform
Cons
- Limited index options trading
- No DMA index trading
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Pricing
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Market Access
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Online Platform
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Customer Service
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Research & Analysis
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Overall
4.2- Expert opinion: Spreadex reviewed & rated
Reduced Index Trading Spreads
CFD and spread betting broker Spreadex has trimmed the spread on its US 100 tech index contract which closely follows the performance of the Nasdaq 100 index. The spread on this very popular index contact will narrow to as little as 1 index point during the peak US session.
The US Tech 100 contract reflects price changes in an index that contains the touchstone stocks of 2024.
Magnificent 7 Stocks such as Apple (AAPL), Meta Platforms (META), Nvidia (NVDA), Microsoft (MSFT) Alphabet (GOOG) Advanced Micro Devices (AMD) and Broadcom (AVGO.
These stocks have been the driving force behind the rally in US equities year to date.
Interest in and the sentiment around technology have been buoyed by the promise of generative AI and the impact it could have on our day-to-day lives.
However, investors recently appeared to lose confidence in the prospects for the Tech sector and the US 100 index fell by as much as -7.00% in April, with Nvidia falling by -10.00% in a single session, though both instruments have now partially recovered.
Tighter spreads but not the tightest
Spreadex decision to trim the spread on the US Tech 100 is to be welcomed.
However, the 1.0 spread on the contract could still look expensive when compared to its broader-based rivals, the S&P 500 and Russell 2000.
The US 500 contract has a spread of 0.4 points and the Russell 2000 contract from 0.3 points at Spreadex.
That difference in pricing is likely down to levels of volatility within the respective indices, though it is worth noting that the S&P 500 and the Russell 2000 include the major Nasdaq 100 stocks.
Competitive Index Trading Spreads
So how does Spreadex’s new US Tech 100 spread compare with the competition?
Well, a spread bet on IG’s daily US Tech 100 carries a spread of 1.0 index points between 14.30 and 21.00 London widening to 2.0 points between 21.00 and 14.30 the following day, though for between 22.00 and 23.00, the spread widens to an unpalatable 5.0 points.
At City Index spread in the US Tech 100 starts at 3.0 points, whilst rival CMC Markets offer spreads on the index from 1.0 point.
The width of a spread can be an important factor, particularly for very active traders, whose marginal profitability can be significantly boosted by tighter trading conditions.
Conversely, of course, the price maker sees a reduction in income when spreads narrow, though they hope to make up for the slimmer margin through an increase in turnover.
For many index traders, however, it’s more about being directionally correct than anything else.
But of course, an extra couple of points in PnL at the end of a trade is always welcome.
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Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
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