Spread Betting Company Minimum Stakes

Over on the “Talk with Tony” page, Mrmenstig asked a question (edited for clarity) as follows:

Recently I’ve noticed a lot of the instruments I’d like to bet on have a mininmum size of £5-per-point with the provider I use. I was looking at ETX Capital over the weekend and found they have a minimum of 50p size; do they also impose this £xx per point size or is it 50 p accross the board?

This question prompts me to reiterate that there is very often a trade-off, which is why in my Better Spread Betting book I suggest holding accounts with more than one of the spread betting companies.

For example: 

  • SpreadEx is a mighty fine spread betting company in many respects, but they do tend to mandate a minimum £5-per-point bet size on some equities that other providers allow you to trade at smaller stakes.
  • IG Index allows you to trade very small stakes within the first few weeks of opening an account, and thereafter at a minimum of £1-per-point (generally)  but with some equities — admittedly the ones that are generally not even available on other platforms — at a higher £5-per-point minimum and some (including my recent Italian equity) at a lower £0.50-per-point.
  • Capital Spreads, and most likely InterTrader too, lets you trade a wide range of equities with a minimum £1-per-point stake seemingly across the board, but beware that on some foreign (e.g. USA) equities and commodities this may be equivalent to trading at £100-per-point.
  • ETX Capital allows you to trade many if not all equities as low as £0.50-per-point, but offers far fewer equity markets than either IG Index or Capital Spreads.

Basically, you pay your money and you take your choice. And if you have more than one spread betting account, you can choose on a case-by-case basis.

Disclaimer: this posting is for general education only; it is not trading advice.