I review spread betting sites like IG Index, ETX Capital and CapitalSpreads so you know which sites offer the best experience for you to spread bet at. (Feel free to use this article online and in your email newsletters as long as you leave it intact and do not alter it in anyway. The byline and biography must remain in the article).
Capital Spreads has tighter spreads on most products but this is only very important to high frequency traders. If you use spread betting as a tax efficient way to hold shares then the spread isn't that important. You may have say a dozen stocks you hold and roll them over once every 6 months giving you 20-30 trades a year.
Negatives of Capital Spreads -:
- Capital Spreads website can be slow to load, which can be very annoying.
- Capital Spreads have a tendency to freeze and lag.
- Capital Spreads website is ugly and doesn't look as professional as IG Index.
- Capital Spreads does not offer as many products to trade.
- Capital Spreads often re-quotes prices saying the market has moved, I haven't had that with IG yet. Not sure why CapitalSpreads does this, is it the ping to the server? Is it their tighter spreads? Not sure but it is annoying and sometimes exasperating to the point to almost make you want to leave it and go to the higher spread IG Index that doesn't re quote as often.
As I said CapitalSpreads have tighter spreads and it is definitely a good thing to be cheaper than IGIndex. Looking at IG Index - they charge you 2 pips to trade the FTSE while Capital Spreads charges you only 1 - that's double the spread!! Their spreads are much more competitive on shares too.
However, having said that service and quality of the trading website are important as well and there IG has the edge. I'm sure that if Capital Spreads can improve their website to match that of IGIndex then they could steal a lot of business away from IG index.
Another important part of a growing industry like spread betting is the need to advertise. As far as I can see Capital Spreads doesn't advertise much at all while IGIndex does.
However, Capital Spreads use a different (and probably a much more cost-effective strategy) their offering - they use partners like Tradefair, PaddyPower, etrade, Saxobank...etc to acquire the customers for them. Although, I'm seeing lately that Capital Spreads are becoming more aggressive - they are advertising on ADVFN and newsletter insertions.
One thing is for sure Capital Spreads is already bigger now than some other spread betting providers who have been in the industry for over 25 years and that's a remarkable achievement.
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