Capital Spreads Review
Capital Spreads started out as a financial spread betting site in 2003, this being the trading name of London Capital Group Limited (LCG). LCG is a wholly owned subsidiary of LCGH plc and is authorised and regulated by the Financial Conduct Authority (FCA).
Capital Spreads is one of the leading spread betting companies in the UK. Spread betting is a tax-efficient way of trading on the price movements of a great variety of financial products, including indices, currency pairs, commodities and shares. Other areas of business at Capital Spreads include CFDs trading and forex.
Safety of funds
As we have already mentioned, Capital Spreads is regulated by the FCA. Clients of a FCA-regulated brokerage fall under the Financial Services Compensation Scheme where the maximum compensation cover is £50,000 per person per regulated company. What is more, the is subject to the FCA’s client money rules, so client funds and the firm’s own funds are held in segregated bank accounts. In addition, FCA applies a minimum capital requirement and financial services providers are obliged to hold at least €730 000. For the purposes of comparison, similar requirements apply in most jurisdictions: $20 million in the US, which is the largest amount, €1,000,000 in Cyprus, $1,000,000 in Australia.
Capital Spreads offers tight fixed spreads. Spreads for the major currency pairs such as EUR/USD and GBP/USD are 1 pips for instance and the spreads on the most traded indices such as the Rolling daily UK 100, German 30 and Wall street are as low as 1 pip.
In this trading direction, Capital Spreads also offers some of the tightest spreads available: 1 pip on UK 100 shares and EUR/USD spot.
Unlike many other brokers, Capital Spreads charges no commission on trading stock CFDs (CMC Markets for instance requires a commission fee of 0.10 % of the volume traded).
One of the most important trading conditions is the margin one. Whenever a trader has an open position, they have to maintain the minimum margin requirement for the currency pair in order to avoid automatic closing of positions upon Margin Call. As regards the margin requirements applicable to trading at Capital Spreads, they are not featured as a percentage of the volume traded, but rather as a single sum per lot. For most currency pairs, majors included, the margin requirement amounts to £40 (except for the GBP/USD its amounts to £60). The highest margin requirement value is £500 and it applies to the exotic USD/MXN currency pair.
Margin requirements to trading indices, futures and shares, on the other hand, are expressed as percentage:
– As for CFDs/spread betting on futures and indices, average margin requirements range between 0,30% and 0,40%.
– As regards CFDs/spread betting on shares, margin requirements range from 0.5% (UK (FTSE 100)) to 2% (Germany, Denmark, South Africa).
Since CFDs and spread betting involve leverage, they carry a high level of risk and traders may lose more than their initial deposit. That is why most brokers provide various risk management tools in order to lower the risk. One of those tools are guaranteed stops and Capital Spreads offers an option to set such on an open position, allowing their clients to trade safely, without incurring extra losses in case of high market volatility. Of course, an extra fee is charged on guaranteed stops, its amount ranging from 3 pips on major currency pairs to 250 pips on the GBP/ZAR and as regards shares – from 0.5% to 2%.
Like many other brokerages, Capital spreads also offers cash monthly rebates in order to attract new clients and keep the existing ones. As long as you hold a Capital Spreads account and live in the UK, automatic rebates apply to reduce your trading costs. Their amount is determined on the basis of volume traded and it ranges from 5 to 12,5%, provided that the upper limit is £1,000 per calendar month.
Capital spreads’ award-winning platform is a web-based one, so there is no need to download anything. It was voted as the easiest to use by Investment Trends in 2013. There is also a mobile version of the platform available for iPhone and Android devices.
Capital Spreads Spread Betting platform interface
What is more, Capital spreads offers a number of trading tools and resources to its clients, accessible through any live account via the Trading Tools section free-of-charge:
– Digital Look providing an Economic Calendar, containing important economic information and events from all over the world, News Centre and various useful data;
– Technical Analysis, supplied by Trading Central, a third party which provides research analysis;
– Planning Tools, including a trading plan and trading diary available so that a trader can easily develop a trading strategy and keep record of entry and exit levels, stops, your margin requirements and, what is most important – profit or loss.
All major debit and credit cards are accepted (except American Express and some international Visa Electron cards) and for payments made by credit card there is a 2% charge. Payments can also be made by bank transfer, Online bank transfer and Skrill. Here you can view other brokers, allowing deposits/withdrawals by Skrill.
UK-based spread betting and CFDs brokerage Capital Spreads is a well-regulated company offering tight fixed spreads on over 3000 markets via its in-house platform.
Capital Spreads Review Conclusion
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