Capital Spreads is a financial spread betting company that provides tight spreads on the market and an easy-to-use platform. It’s a division of the London Capital Group, and comes under the FSA for regulation. The company was founded in 1996 as a proprietary trading business and has since grown to now offer financial derivative products, foreign trading and a derivatives broking service to both retail and professional clients. Today, Capital Spreads is one of the larger spread betting brokers, reporting an active client base of over 50,000.
Capital Spreads offers a demo account, which unfortunately does not have all the facilities of an active account as the charting is limited. However, the company does accommodate novice traders by offering seminars and online training in spread betting which includes a eight chapter paper handbook that is given to new traders who have funded their account with at least £100. The manual explains trading in detail and there are also sections covering both technical and fundamental analysis giving clients a good overview of these two investment techniques.
Capital Spreads enforce a mandatory automatic stop loss order generator which ensures that every time you trade you have an exit order in place. The automatic stop loss level can of course be adjusted to any level you want so long that you have sufficient funds in your account to support this.
Tradable markets: Wide range of products from the UK and international financial markets. These include major indices, currencies, equities, commodities and treasuries.
Features:
- prides itself on: gearing – deposit to open a position ‘far less’ than competitors; ‘tightest spreads’ in the industry; exceptional customer service.
- every new trade automatically allocated a stop loss based on 80% of the funds available in the client’s account, or set at a ‘maximum computer-generated stop loss’. This ensures each client’s risk is effectively controlled (although the stops are not guaranteed) and there are always enough funds to support the trade
- minimum stake size is either £1, $1 or €1 per point/tick.
- does not require a minimum deposit.
- does not offer credit accounts.
- quotes on over 3000 products including: main indices, currencies, commodities, bonds & interest rates, FTSE 100 & FTSE 250 shares, DOW 30, S&P 500, NASDAQ 100 and the DAX 30. If a client cannot find a product, it can generally be added on request.
Spread betting and CFD trading carry a high level of risk to your capital and can result in losses that exceed your initial deposit. They may not be suitable for everyone, so please ensure that you fully understand the risks involved.
Seminars on spread betting available: Introduction to spread betting and technical analysis seminars offered regularly in London.
Minimum stake & deposit: Min stake is £1. Min deposit varies depending on the market you trade but should be above £100.
Credit spread betting accounts available?: Spread betting credit accounts not currently available.
Demo account available?: £10,000 spread betting demo account available.
Pros – Tight fixed spreads and competitive margins coupled with an intuitive and simple trading platform. Good trade executions.
Cons – Won’t quote some of the smaller companies. Some reported cases of slippage (although to be fair a degree of slippage is unavoidable when trading) and occasional pricing errors.
Best For – Private traders looking to swing trade blue chip stocks or other liquid markets.
We give Capital Spreads a Rating of: for range of markets, margins, spread sizes and general client satisfaction (ratings are from 1 to 5 with 5 being highest).
Unlike some other spread betting brokers, Capital Spreads claims to offer fixed spreads most of the times – in fact they state that their headline spreads are tighter for longer than their competition. Not spreads ‘as low as’ or ‘from’ but spreads fixed at competitive rates throughout the trading day. This is better than variable or ‘typical’ spreads that tend to widen during volatile market conditions meaning that you might not get the spread you want when you actually want to trade. One of the most popular currency pairs, the EUR/USD, is quoted with a one-point spread throughout the 24-hour trading day.
With a Capital Spreads trading account you can access a wide range of financial markets such as UK, European and USA as well as other global shares, foreign exchange, indices, commodities and bonds. The company aims to offer great value for money by offering typical spreads significantly better than those offered by its competitors.
Take a look at some of Capital Spreads tight fixed spreads*, available to all clients:
| Market | Fixed spread |
|---|---|
| UK 100 | 1 point |
| DAX 30 | 1 point |
| Wall Street | 1 points |
| Nasdaq | 2 points |
| Market | Fixed spread |
|---|---|
| EUR/USD | 1 pip |
| EUR/GBP | 0.8 pip |
| USD/JPY | 0.8 pip |
| GBP/USD | 1.8 pips |
| AUD/USD | 1 pip |
* Capital Spreads’ spreads are fixed during trading hours and non-force majeure events.
The trading platform which Capital Spreads offers was improved and updated in 2010. The improvements listed include split screens, with the ability to re-organize the display to suit your requirements, and stop and limit orders on trade tickets. Stops are always on there and it is easy to use. The platform accommodates both contracts for difference and spread betting. The trading platform is browser-based and you do not need to download any software onto your computer. Capital Spreads have also recently launched a new charting package allowing spread trading the ability to apply technical analysis indicators set trading alerts, backtest their trading systems and a whole lot more and this is available to clients free of charge. The backtesting facility is actually quite simple to use and allows to see how your strategy would have fared in the past. You input your strategy based on the technical indicators you select and then use it to see how you would have performed. In order to check their new charting package we’d suggest you open a free demo account with £10,000 play money
It’s particularly interesting to note that the Capital Spreads web site offers a tab of trading tools, and these include many useful features like Guaranteed Stops, Limited Risk accounts, News Streams and Trailing Stops across all financial markets. From your live account you can access these portals from the “Trading Tools” button located in the top right-hand corner of the screen. By clicking on this a new window will appear and you will be able to access the following:
- From here you can access Trading Central’s technical strategies which are updated several times throughout the day and cover index, FX, equity and commodity markets.
- Trading Central’s award-winning methodology is backed by time-tested indicators. Their approaches match requirements of various investment styles, from intraday trading to swing trading and long term investments.
This includes an economic calendar with detailed informations about all data major economic releases such as unemployment and inflation data as well as reports on growth, including the previous, forecast and actual figures. There is also a plethora of extra information including analysis tools such as a stock screener, heat maps and a news centre.
This is a live market commentary provided by RAN Squawk which gives you the opportunity to listen to important market developments as they happen. As well as real-time audio news & commentary for the financial markets there is other material such as real-time scrolling news, calendar, research reports and videos.
The live feed can act as your eyes and ears on the markets. Listeners range from the biggest hedge fund managers in the world to top tier investment banks, fund managers, brokers and individual traders.
Of course, there are videos of the daily or weekly events with commentary, and a calendar of economic data for those who wish to trade the news. But they also supply planning tools, such as an outline for a trading plan that you can fill in, and which reminds you of the important questions to address; and a template for Microsoft Excel users to use as a trading diary. The trading platform which is web-based includes a variety of streaming tools, such as quotes and charts, and links to research available from Trading Central. Further educational tools include a Live Squawk to help traders stay in touch with market news headlines during the trading day, trading signals and ‘Heatmaps’ that provide at-a-glance guides to the market hotspots.
When you open an account, you will find there is a choice of currency that you can use – sterling, US dollars, or euros. Capital Spreads does not require a deposit for you to open a trading account, although you must deposit funds before attempting any trading. In this case, the minimum deposit depends on the product you are trading. What this means is that you do not have to deposit funds in order to play with their software. As mentioned, the demo account does not give full functionality of the charting, so this is a way to further test whether you wish to start trading with Capital Spreads.
“CapitalSpreads’ clients can access a trading platform that offers low margins and tight spreads with free unlimited conditional orders, access to all main UK stocks, live pricing, market news and analysis, and free charting which will ensure clients are more equipped than ever to make smart, strategic stock market trading decisions.”
When it comes to user reviews of Capital Spreads, it appears that most people find that they give great customer service, as well as competitive spreads on their products, which number more than 2500. The charting is reported as satisfactory, which obviates the need to buy any third-party software, and the low deposit amounts were appreciated by the clients.
Anything for newbies?: If you open a live account with Capital Spreads and fund it with at least GBP100 you are eligible to receive a copy of the ‘Capital Training Programme’ which explains the mechanics of spread betting and risk management in detail. In addition to the Capital Spreads demo account and the eBook, newcomers may also wish to download the Trading Plan and Trading Diary tools available in the Trading Tools section of the website. Guaranteed stops are also available to help clients protect themselves against any possible slippage or market gaps.
Lastly if you are new to spread betting you may want to attend on the of free monthly ‘Learn to spread bet’ seminars presented by one of the company’s senior dealers who will explain the subject and how this form of trading works as well as the risks involved. For more advanced traders Capital Spreads also offer another seminar ‘How to build a spread betting strategy’ hosted by Certified Financial Technician, Malcolm Prior, who will take participants through the main steps in building a trading strategy. Another seminar class ‘Upcoming trading opportunities’ seminar hosted by Market Economist, Bill Hubard, takes viewers through the main happenings in the market today.
Mobile Trading: Yes. Mobile trading (via Android, iPhone and Tablet) is supported. Capital Spreads in particular offers an iPhone application which lets you check prices, open and close spread betting trades, create and amend orders and check charts. The charts update automatically and can even bet set for different time intervals ranging from anything from a minute to a day.
Verdict: Overall, quite a standard trading platform but very few requotes and generally good execution. Clients have access to a diverse array of markets, including all the main global equity markets, indices, foreign exchange, commodity and bonds markets. Bets are placed via a state-of-the-art trading platform in markets where Capital Spreads offer some of the tightest spreads in the industry.