Where to Spread Bet Obscure Equities

If you’ve followed my previous postings, you should know by now that I’m inclined towards spread betting individual equities in preference to stock indices, commodities and foreign exchange currency pairs. But never say never, eh?

Anyway, most of the spread betting companies allow you to trade most of the big-name equities, but not all spread betting companies provide equal access to the lesser known stocks.

In this article I undertake a cursory inspection of how five different spread betting companies compare when it comes to letting you trade obscure equities.

A Table of Where to Trade

In the following table I have taken a subset of the not-so-obvious equities from a that portfolio I hold with IG Index, and I’ve chosen this spread betting provider as my baseline because I have already deemed that they offer the widest range of individual (UK) equities. So IG Index is represented in the first column, and In the other columns I give an indication of the other spread betting platforms on which you can trade the same subset of equities… or not.

As I worked my way through the alphabet, I stopped after the letter “C” because a clear pattern was already starting to emerge. And quite frankly, I have better things to do with my time than trawl through my entire portfolio(s). But I did go on to throw in a few more examples of interesting cases — like equities that could not be traded on the most comprehensive IG Index platform (have I given the game away?), or small-cap equities that can be traded pretty much anywhere.

The table that I devised looks like this:

Comparing Like with Like

This is not the most scientific study ever undertaken, but it provides a good rule-of-thumb indication of what I already knew to be true. But the devil is in the detail, and I’m not necessarily comparing like-with-like.

Whereas the obvious answer would be always to choose IG Index over the other platforms when it comes to trading individual “obscure” equities, we may need to consider other factors like:

• Many smaller-cap equities require a £5-per-point minimum stake size at IG Index.
• Capital Spreads provides a better guaranteed stops orders facility (in my opinion).
• For highly liquid “blue chip” stocks, the platforms other than IG Index might (but might not) offer some added value in the form of tighter spreads or better margin.
• When it comes to international equities, the results may be different from my UK equities results.

The final point deserves some further explanation.

International Equities

This article has focused so far on the availability of UK Equities for trading, but when talking about “obscure” equities we may really be talking about international equities. Here the plot thickens.

Browsing the list of available markets on the Cantor Capital platform suggests that they offer only UK, USA and European equities. So they’re still bottom of the pile, unfortunately.

In addition to the international equity markets offered by Cantor, City Index offers a range of Canadian, New Zealand and Asian (Hong Kong, Japan and Singapore) shares — though in all likelihood, a limited set of them.

Capital Spreads appears to shun the Australasian markets in favour of European (France, Norway, Holland, Sweden, Denmark and Ireland), South African, and Indian shares in addition to the expected UK and USA shares.

Now guess what? IG Index appears to offer equities in all of the international markets covered by the other spread betting companies. So when it comes to trading obscure equities, at home or abroad, IG index still appears to come out on top!

The Bottom Line

In this article I have tried to present an honest assessment of the range of individual equity markets that can be traded via various spread betting platforms. There may be errors and omissions, for which I apologise to the respective spread betting companies involved, but I think that the overall messages are quite clear:

• If you want to trade individual UK equities, you should perhaps be thinking about IG Index and Capital Spreads in preference to some of the other spread betting companies.
• If you want to trade international equities, IG Index is still top of the pile and Cantor Capital is still bottom of the pile, with Capital Spreads and City Index following.

If you’re not into individual equities, there might be some very good reasons for choosing Cantor Capital or any other spread betting company (not mentioned here) in favour of my “obscure equity” favourite platforms. Or there might not.

In any case you can get the best of all worlds by operating an account with more than one spread betting provider, and utilise each one for what it does best. I know what I want from the spread betting companies, and I know which ones do it best.

Tony Loton is a private trader, and author of the book “Position Trading” (Second Edition) published by LOTONtech.