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Spread Trading Frequently Asked Questions 

These are the most commonly asked questions about our Spread Trading service.

What is Barclays Stockbrokers Financial Spread Trading?
Barclays Stockbrokers Financial Spread Trading is our spread betting account. Spread betting is a high-risk, high reward activity. It offers a tax-free* way of trading a wide variety of products across the global financial markets including major indices, currencies, commodities and individual equities quoted on leading exchanges, and their associated options. It's a simple, versatile tool that can help you to profit from both up and downward movements in prices (if you bet in the right direction).
*Please note that tax laws may change. Financial spread betting profits and losses are not currently subject to UK capital gains tax or stamp duty. You should check your own tax position with your independent tax adviser.

Who is my spread betting contract with?
For the purposes of spread betting any contract is between you and City Index and all dealing, administration and settlement is carried out by City Index Limited or by agents acting for them and Barclays Stockbrokers is not responsible for any of the functions they perform.

What is a spread bet?
A spread bet is an agreement between a client and a provider to exchange the difference between the opening and closing value of the bet at a future date - this date may or may not be specified depending upon what you are trading. You are speculating on the direction of the future price movements in an underlying instrument; you indicate an amount you want to bet on each point movement. Your profit or loss is simply the difference between the opening price and closing price of your bet, multiplied by your stake. 
 
What is the difference between Spread betting and CFDs?
The main differences between Spread betting and CFDs are:
1. When Spread betting you are not liable for CGT on profits however, you cannot offset losses either.  With CFDs on the other hand you are liable for Capital Gains Tax (CGT) if you make profits but losses can be offset against other CGT liabilities. 
2. When you Spread bet you have a set close date which cannot be changed unless you roll the trade. With CFDs however, you choose when to close your position.
3. You do not pay commission on Spread betting but you do with CFD. With Spread betting the commission is priced into the spread.


What are the advantages of spread betting over conventional forms of trading?
There are several:

  • You pay no direct commission** or UK stamp duty* 
  • You can bet on markets going down (going short) as well as up
  • All profits you make are free of UK Capital Gains Tax *
  • Leverage - you only deposit a fraction of the contract value
    ** commission is effectively built into the spread 
     

What are the disadvantages of spread betting?
Spread betting carries a high level of risk to your capital and you should only deal with money you can afford to lose. The value of investments can fall as well as rise and you may lose significantly more than your initial margin payment. If you want to spread bet you need to sign a risk warning notice. Spread betting may not be suitable for everyone so please ensure you understand the risks involved before trading.

What is leverage/gearing?
Leverage/gearing allows you to enhance your return without increasing the amount of your investment. Essentially, it is a method of financing an investment by which you only pay a small percentage of the purchase price in cash, with the balance supplemented by borrowed funds, in order to generate a greater rate of return than would be produced by paying primarily cash for the investment.
 
What are the advantages of spread betting with Barclays Stockbrokers Financial Spread Trading?
They are:
  • We offer competitive Notional Trading Requirements (deposit requirements)
  • Instant execution and clear documentation
  • Fully interactive online dealing
  • Extended trading hours (for certain markets) Limited risk bets (guaranteed stops) available on certain markets (at start of bet)
    Small minimum stake sizes. 

What is the risk level associated with spread betting?
A key feature of spread betting is the leverage that it affords. Fluctuations in the value of the underlying instrument can quickly lead to profits or losses, which can exceed the initial deposit. Spread betting carries a high level of risk to your capital and you should only deal with money you can afford to lose. The value of investments can fall as well as rise and you may lose significantly more than your initial margin payment. If you want to spread bet you need to sign a risk warning notice. Spread betting may not be suitable for everyone so please ensure you understand the risks involved before trading.
 
How can I spread bet with Barclays Stockbrokers Financial Spread Trading?
You can spread bet online or over the phone by calling us on 0845 355 0803.
0845 calls will cost no more than 4p per minute, minimum call charge 5.5p (current at August 2006) for BT customers. The price on non BT phone lines may be different.
 
Can I transfer money from my existing Barclays Stockbroker accounts to my Spread Trading account and vice versa?
Yes simply call the Client Service Team. It will take a maximum of 24 hours.

Who do I contact if I have a problem or need more information about the Barclays Stockbrokers FST service?
Call 0845 601 7788.
 
How can I open a Barclays Stockbrokers Financial Spread Trading account?
The quickest way to open an account is to apply online. You will be entering into a contract with City Index Limited.
If you prefer you can complete a paper based application by downloading a PDF application form.

Can I link my current Barclays Stockbrokers Financial Spread Trading account with BARXdirect?
No, but it is just one click away.

Funding your spread betting account?
Before you can start spread betting, we ask that you deposit appropriate funds into your account. Please make sure your name and account details appear as the reference on all transactions.
You can deposit funds to your Barclays Stockbrokers Financial Spread Trading account by -
1. Debit card - Delta, Maestro
2. Cheque - Drawn on a UK clearing bank and made payable to you. Please ensure you write your account number on the back.
3. Telegraphic Bank Transfer
4. Transfer from your Barclays Stockbrokers account. Please call the Barclays Stockbrokers Contact Centre to make the transfer.
Note: we cannot make refunds to your Delta card or to third parties even with your written permission.
 
What are the dealing hours for Barclays Stockbrokers CFDs?
The dealing hours for Barclays Stockbrokers CFDs are dependent on the opening hours of the underlying markets but please note that the major index contracts - FTSE 100, Wall St, and S & P are available between 7.00am and 9.15pm. 

Can I short stocks using Spread betting?
Yes. It is only possible to short UK  stocks which have at least a market capitalisation of £50mn. It is also possible to short EU and US stocks however only those with a market capitalisation of greater that €500mn and $500mn.

What is a Standard Account?
With a Standard Account the amount that you deposit will determine the total size of any trade on the account and will not be considered as your ultimate financial liability. If your positions move against you, you may need to make a margin payment to maintain your position. This is because in addition to the initial margin required to create the position, you must also meet the full value of all running losses from your positions.
You have access to a full range of instruments including UK, US and European equities, indices, sectors, FX, commodities, precious metals, bonds and interest rates.
You must deposit funds in advance of placing a trade and you must meet running losses in accordance with the terms and conditions. Please note that it is your responsibility, and not Barclays Stockbrokers Financial Spread trading, to monitor your positions and make margin payments immediately upon margin becoming due. See What is the Barclays Financial Spread Trading margin call procedure? for more details about margin calls. Optional Guaranteed Stop Losses are available on more liquid markets on payment of additional premium.
 
What types of spread bets are available?
There are two types of spread bets, rolling and quarterly. Bets are always quoted in UK sterling.
1. Rolling bets - A rolling bet is based around the underlying share price to which a small spread is applied. Positions which are open at the end of each day are automatically rolled over into the following day. The existing position is closed at the end of day price and a new position opened at the same level. Financing applies to all rolling financial spread positions held overnight. If you are holding a long position, you pay the financing and if you are holding a short position, you receive the financing. The reason for this is that spread betting is a form of margined trading. The person going long is essentially borrowing money and the person going short is lending money.
2. Quarterly bets - Quarterly bets always have an expiry date when your position will be closed. A quarterly bet, also know as a future or forward price, is derived from the current underlying market price, but adjusted for the cost of funding until the future date.
Funding has two components: financing and dividends.
Quarterly bets have financing built into the quote i.e. you aren't charged any financing on a nightly basis, but the cost of all the anticipated funding up to the expiry date is built into the quote offered.
If the equity is likely to go ex-dividend before the future date, the value of the estimated net dividend is deducted from the future price since the holder of a spread betting contract is not entitled to any dividends. A spread is then applied around the adjusted future price.
Due to financing and dividends the quote given may be quite different to the underlying market price. We quote the nearest two months of the March, June, September and December cycle and the expiry day is the Tuesday before the third Wednesday of the contract month. Quarterly bets can be closed out at any time before the expiry date or left to cash settle at expiry.
 
Is commission charged on opening and closing of spread bet positions?
There are no direct commissions on spread bet transactions, although the spread of the instrument quoted is widened compared to the underlying, therefore representing an indirect commission.

What does the term LIBOR mean?
LIBOR (London Inter-Bank Offered Rate) is the bank rate at which UK banks use to charge interest when they lend each other money. It is compiled by the British Bankers Association. This rate is the basis for calculating overnight financing charges for rolling Financial Spread Trading positions held overnight. It is a commonly used interest rate in more complex transactions.  

How do I calculate margin requirements?
Margin requirements are usually calculated as either a percentage of the position or a fixed factor multiplied by your stake. Specific Market details can also be found online within the Market Information section or by contacting our Client Services team.
Will my profitable positions offset losses on my negative positions?
Yes, both open profits and losses are taken into account when calculating margins.

What are the different types of Orders available?
In addition to our ordinary instant execution orders (which can be placed online or over the phone), we provide a full range of order types to meet your dealing needs. All of these orders can be either good for the day (GD) or good til cancelled (GTC). With the exception of Guaranteed Stops they are also free to place, amend and cancel. Orders are determined by the Barclays Stockbrokers Financial Spread Trading quote, also known as 'our quote'. This means the trigger for the order is based on the Barclays Stockbrokers Financial Spread Trading quote and not the quote in the underlying market. There are restrictions on amending stop loss orders.
Limit orders - are used to trade at a better than current market price. They can be used to either enter or exit a position.
Stop orders - are used to trade at a worse than current market price. They can be used to either enter or exit a position. We always recommend you place a stop order on an open position to help control your potential losses
OCO orders (one cancels other) - allow you to link a stop-loss order and a limit order to an open position. This is generally used to control possible losses with the stop-loss order and take possible profits with the limit order. If one of the orders is executed, the open position is closed and the remaining order is automatically cancelled.
Guaranteed Stops - similar to an ordinary stop order, except that it guarantees that you exit your position at the price you set as opposed to only closing you out of your position at the first available price which could be a long way from the price you placed your stop at. For the benefit of this 'insurance' against a sudden movement in the instrument (also known as 'gapping') you have to pay a premium to take out a guaranteed stop. Guaranteed stop losses are only available at the time of opening the bet.
 
What is the minimum amount I can use to spread bet?
Each instrument has its own minimum trade size. Please refer to the Market Information Sheets (MIS) for more details.
 
Can I amend limit orders when the market is closed?
Yes, you are able to amend existing limit orders out of market hours, but you can not amend stop loss orders. You can amend an order online or over the telephone.
 
What are Stop Losses and Guaranteed Stop Losses?
A Stop Loss order allows you to set a price which if reached will automatically trigger a sell order (for long positions) or buy order (for short positions) to close your current position. This facility is available on most deals when placing a deal by telephone. A simple stop loss will be executed at the next available price at the time of dealing.   A Guaranteed Stop Loss is, as it suggests, guaranteed to be executed at the price you specify even if the underlying share never actually deals at the price you specify due to a sudden price movement. There is a charge for Guaranteed stop losses.
 
What is the difference between a guaranteed stop loss and a normal stop loss?
If you feel that you need greater comfort than that afforded by a simple Stop Loss then you may be able to opt for a guaranteed stop loss. Guaranteed stop losses are not available on all instruments. As the name suggests a guaranteed stop loss guarantees that you will obtain your stop loss trigger value, whereas a stop loss will trigger at the best available price.
There is an additional charge for this type of order known as the guaranteed stop loss premium and there are minimum distances that orders must be placed away from the current price. The premium is lower and the distance is shorter with a Limited Risk Account.
 
Are there any delays in executing orders?
Orders which exceed our standard quoted size may be subject to a delay if we hedge the order in the underlying market but you will be advised of any delay at the point at which you place the order.
 
Can I execute trades by email?
No, Financial Spread Trading can only accept instructions via the telephone or online.
 
Can I trade commodities using Spread Trading?
Yes.

Can I trade foreign stocks using Spread Trading?
Yes.

Can I trade options using Spread Trading?
Yes. Please call our Client Services team on 0845 355 0802.

What other investments can I trade through Barclays Stockbrokers?
1. Stocks and shares that are listed on the LSE and plus markets
2. Foreign stocks (telephone only)
3. Covered Warrants
4. Traditional CFDs
5. Listed CFDs
6. Bonds (gilts and corporate bonds)
7. ETFs (Exchange Traded Funds) and ETCs (Exchange Traded Commodities)
8. PIBS (Permanent Interest Bearing shares)
9. Investment notes (tradable structures products)
10. REITs (Real Estate Investment Trusts)
11. Funds, Unit trusts and OEICs
12. Options and futures through Financial Spread Trading
13. FX (Foreign Exchange) through CFDs/FST and BARXdirect FX.

Are prices and graphs live-streaming on a Spread Trading account?
Yes they are.

Do I need to hold any other type of account to spread bet with Barclays Stockbrokers Financial Spreads?
No you can open a Barclays Stockbrokers Financial Spread Trading account without holding any other Barclays Stockbroker account.
 
Will my spread bets count towards my Barclays Stockbrokers nominee deal count?
No. Financial Spreads deals will not qualify for reduced commission, or be eligible to add to your deal count.

Do I need a separate login for my Financial Spread Trading account?
Yes, you need a separate login to allow you to view and deal on your spread bet account. You will be given this information when you open your account. 
 
Does Barclays Stockbrokers offer corporate Spread Trading accounts?
Yes, please contact Will Burge on 0044 (0) 777 555 0205 or will.burge@barclays.com for further information.

Who do I contact for more information on Financial Spread Trading dealing, or if I have a question?
Barclays Stockbrokers Financial Spread Trading team - call them on 0845 355 0800 or email them on support@barclaysstockbrokerscfds-fst.co.uk Please note that calls may be recorded for our/your protection.
 
Who is Barclays Stockbrokers Financial Spread Trading?
Barclays Stockbrokers Financial Spread Trading is a trading name of City Index Limited (CI) whose registered office is Park House, Finsbury Circus, London, EC2M 7EB. For the purposes of spread betting any contract is between you and CI and all dealing, administration and settlement is carried out by them and Barclays Stockbrokers are not responsible for any of the functions they perform.