Capital Spreads Review

Published by Filipe R. Costa on Tue, 22/03/2011 - 16:52
capital spreads

Capital Spreads is a division of London Capital Group, a company listed in the London Stock exchange. Created in 2003 and based in London, Capital Spreads is now one of the biggest financial spread betting companies. We reviewed the company operations to help you understand what it can offer you.

Company Overview

Capital Spreads is one of the biggest UK companies in the spread betting and CFD's industry, giving retail investors  access to a wide range of financial products. The company is a division of London Capital Group Ltd which belongs to London Capital Group Holdings Plc (LCG). LCG is listed in the London Stock Exchange, and is a company regulated by the financial Services Authority. Capital Spreads is based in London, UK, and was created in 2003.

Range of Markets

Capital Spreads offers you a large range of markets that are divided into indices, shares, forex, commodities and interest rates and bonds. Let's take a deeper look into each category.

Indices - All major indices are available. You can trade FTSE 100, Dow 30, Nasdaq 100, S&P 500, Dax 30, CAC 40, Nikkei 225, Euro Stoxx 50. If you are looking for more specific indices you will also find for Ireland, Australia, Hong Kong, Singapore, Brazil, and other countries. The offer is vast and rapidly growing, so it's better to check out with Capital Spreads for an updated list. Besides providing country indices, Capital Spreads also gives you some specific indices like MDax or FTSE Mid250. Index Differentials are also available. Many of these products are provided as rolling daily and as future contracts, so each trader can trade on its preferences.

Shares - Spread betting has its origins and most clients in the UK, so the offer of FTSE shares is really wide. You will find shares from FTSE 100, FTSE 250, FTSE 350, and also FTSE Small Caps. But you are not limited to the UK. There is a selection of shares from the US, Germany, France, Holland, Sweden, Norway, Denmark, South Africa, Ireland, and India.

Forex - Currency traders can trade many FX pairs, in a rolling daily or quarterly basis. Major pairs include: EUR/USD, EUR/GBP, GBP/USD, GBP/JPY, USD/JPY, GBP/CAD, and others as well. Minor and exotic pairs are also available. Examples are: USD/PLN, GBP/NZD, or GBP/ZAR. Many other are available and I just can't describe here every pair.

Commodities - There is a growing interest in commodities due to their performance during last years and their impact in equity markets and World economies. At Capital Spreads you can have a stake at the high demanded Crude Oil, Gold, Gas, Heating Oil, and Silver. If you like soft commodities, then why not also have a stake at Coffee, Soybean, Cotton, Sugar, and some Orange Juice?

Bonds and Interest Rates - To complete the product offer there are also some bonds and interest rate products. Available products are: Bund, Gilt, Bobl, US 10y, US 30y, Euribor, Eurodollar, Euroswiss, and Short Sterling.

Spreads, Margins & Minimum Stakes

A crucial point for spread betting, as the name refers, is the spread. The lower the spread, the shorter the mountain a trader has to climb to just zero out. A trader needs tight spreads, otherwise it is very difficult to make a profit. A long-term investor is not as concerned with that as a trader is. But spread betting is all about trading in the short run, and every fraction of a point is significative. Capital Spreads is very competitive in this matter. Another important point is the required minimum margins and minimum stakes. The table presented below shows typical spreads, initial margins and minimum stakes at Capital Spreads: 

Spreads, initial Margins and Minimum Stakes
  Spread Initial Margin Minimum Stake
INDICES      
FTSE 100 1 30 £1
Dow 30 2 (also during the night) 50 £1
Nasdaq 100 2 20 £1
S&P 500 4 50 £1
Nikkei 225 10   £1
Dax 30 1 50 £1
SHARES      
FTSE 100 0.10% 3% £1
FTSE 250 0.25% 5% £1
Major US 0.10% 5% £1
Major European 0.20% 5% £1
FOREX      
GBP/USD 2 60 £1
EUR/USD 1 40 £1
EUR/GBP 1 40 £1
USD/JPY 1 40 £1
COMMODITIES      
Gold 4 100 £1
Brent Crude 5 130 £1
US Crude 5 130 £1
BONDS / INTEREST RATES      
Bund 3    
US 10Y 4    
Gilt Future 3    
Euribor 3    

Please note that every company has two different periods with different spreads. Usually, during the night, the spread is higher.

Trading Hours

Trading occurs continuously between Sunday 23:00 till Friday 21:15 UK time.

Platform Review

To trade all these products you just have to login from a web browser and you will find a very clean and easy to use platform. All instruments are organised in a simple way. In fact this is one of my favorite platforms because of those characteristics. Simple but complete.

One interesting point to note is that you can trade in spread betting or CFD modes from the same platform. It's very simple to change from one to another.

Capital Spreads also offers a mobile version of its software. Currently it is available for iPhone OS4. Unfortunately you can't use this application if your iPhone is using an older software as is the case of iPhone 2G. There aren't other mobile versions for Android-enabled phones, for example. That is a miss for many traders, but Capital Spreads is already aware of the situation and will certainly improve the mobile offering in the near future.

So, for now, you have a web-based and a mobile versions. Please note that the web-based version is OS independent, meaning it will work under Windows, Mac OS, and Linux environments.

Capital Spreads offers market and limit orders, and there is also the possibility to configure both stop loss and limit profit orders. At an additional cost you can set up a guaranteed stop loss.

As a client you will have access to free charting tools, daily and weekly market commentaries, planning tools, economic calendar, technical analysis from trading central, and free seminars.

Account Opening and Money Matters

A new account is easily opened in just a matter of minutes. You have to fill an online form and send some requested documents and trading will be quickly enabled. There is no minimum deposit required, and you can fund your account using a debit or credit card or via bank transfer or cheque. There is no minimum to request your money back, although a fee of £20 applies for international bank transfers when requesting less than £1,000, which seems to be fair.

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