Finspreads Review

Published by Filipe R. Costa on Thu, 30/06/2011 - 16:56

Finspreads was created in 1999 to provide spread betting services to retail investors. The firm belongs to one of the leading UK companies – City Index group.

Company Overview

Once owning City Index spread betting, why the need for Finspreads? Well, Finspreads is a little different from City Index and other providers. It is tailored for traders with smaller accounts, that want fast and easy access to markets, without all the fancy found at other software platforms. The idea is to simplify and Finspreads is exactly that – a simplification. New traders will find it easy to understand everything. At the same time, they offer trading starting at 10p per point what is really excellent for traders that don’t have thousands in their accounts or for who wants to give it a try before betting seriously.

Range of Markets

The range of markets offered at Finspreads is wide as expected with all competition between providers. You can trade shares, indices, currencies, commodities, bonds, interest rates, and dozens of binary options.

Shares – As it happens with other spread betting providers, the largest offer is of shares from the UK. Here you have hundreds of options that extend beyond FTSE 100 to include small caps. Besides UK, you have shares in all continents (no Africa yet). You can trade in US, New Zealand, Europe, and Asia. In Europe almost every market is quoted. Just as example, you have Portugal, Spain, Italy, Germany, Denmark, and a lot more. In Asia you have Japan, Hong Kong and Singapore. It is impossible to cover here every country. I would say that Finspreads is one of the strongest providers in terms of shares.

Indices – Many options are available here. Of course Finspreads offers trading in FTSE 100, and in all US major indices. Besides that you can bet in volatility index and on indices around the world. Examples are: Spain, Poland, Germany, Korea, Japan, India, Australia, Hong Kong.

Forex– In terms of currencies, several options are available too. All major pairs and crosses can be traded. You have available the Pound, the Euro, the USD, the Aussie, the Loonie, the Swissy, and many more. There is a choice of spread betting in spot and futures style. Finspreads also has FX options available on GBP/USD, AUD/USD and EUR/USD.

Commodities– The offer includes not only the usual commodities as gold, silver, oil, and gas, but also grains, softs, and some other like feeder cattle, live cattle, pork belies and lean hogs. To complement the list, there is also a choice of options on gold and silver for several maturity dates.

Bonds and Interest Rates – There is an offer of US, UK, European and Japanese sovereign debt. In terms of interest rates you will find several futures for Euribor, Eurodollar, and Short sterling.

Spreads, Margins & Minimum Stakes

As pointed before, Finspreads is tailored to smaller investors that not always have thousand of pounds to trade with. This way, minimum stakes are less than £1 for most markets. You can bet from just 10p during a short period after opening an account and continue staking less than 50p thereafter. Spreads are very competitive. FTSE 100 is quoted with 1 point, as is EUR/USD and the Dow 30.

The worst part of Finspreads is on the minimum margin requirement. Usually the minimums are greater on this provider and your positions will be sold when the margin level goes below 80%. You also can't reduce the margin requirement by setting tight stops as it is possible at some providers. This means that you can't gear your account as much as in other companies but it can prove good for you to avoid the temptation of leveraging too much.

The table below depicts the usual spreads charged at Finspreads, along with initial margin requirements and minimum stakes:

Spreads, initial Margins and Minimum Stakes
  Spread Initial Margin Minimum Stake
FTSE 100 1 60 50p
Dow 30 1 120 40p
Nasdaq 100 1 20 40p
S&P 500 4 150 60p
Nikkei 225 20 250 90p
Dax 30 1 80 50p
FTSE 100 0.20% 5 - 20% 50p
FTSE 250 0.20 - 0.40% 20 - 25% 50p
Major US 0.20% 5 - 20% 10p
Major European 0.20% 5 - 20% 50p
GBP/USD 1 160 30p
EUR/USD 1 140 40p
EUR/GBP 1 85 50p
USD/JPY 2 100 50p
Gold 4 350 50p
Brent Crude 6 300 50p
US Crude 4 160 50p
Bund 3 100 60p
US 10Y 2 64 70p
Gilt Future 3 100 50p
Euribor 2 30 50p

Trading Hours

Trading occurs continuously between Sunday 20:00 till Friday 21:15 UK time.

Platform Review

As stated above, Finspreads wants to get attention for its simplicity. The software has all basic features that can be found elsewhere. It is lightweight, browser-based. It is easy to find any instrument and to open a new trade, or set orders. A set of charts is also accessible from the platform.

Because of growing interest in mobile trading, Finspreads launched recently an iPhone application. When you’re out of office, you can use your iPhone to do everything you do on a browser. I can say that the mobile app is quite good.

Account Opening and Money Matters

To open a new account you just have to fill an online form and they will request a proof of identity and residency. After sending this they will review the process shortly and you are ready to deposit funds to start trading. You can deposit using either a debit or a credit card, by sending a cheque, or by making a direct transfer. The minimum first deposit amount is £100 and just £25 thereafter.

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