goto finspreads.com or deal4free.com etc. They all have examples of how spreadbetting works.
Then seach this BB for plenty of in depth discussions about every aspect of spreadbetting.
In a nutshell, you "bet" something ( a stock or an index) will go up or down. You bet so much per penny rise/fall, or , in the case of an index, per point rise or fall.
You think the FTSE will go up from 4000 so you bet £1 per point rise. It goes up to 4050 and you close the bet. You make £50. Simple in theory, complicated and hard in practice. You need to study the whole issue.
In my humble opinion only consider spreadbetting intraday (daytrading) if you are trend following such as a positional trade or following a strategy where a specific signal is employed which from testing you know is reliable and you are looking for a set number of points from this 1 deal- say on the FTSE 10 points.
However if you are considering only taking a few points at a time from each of your deals and trying to trade through the day then Spreadbetting as a scalper is not compatable and you would be better advised to try futures for better spreads.
Wayno - for your info D4F cash FTSE has been 3 points for ages I don't trade the monthly or quarter that they offer but I think they maybe 4 or 5 points unless that has changed since I last looked.
When I last carried out a test of the main SB companies for value for money D4F tended to offer the best spread and value over the others. However a number of other companies were starting to match them when they were at 4 points and had better margin requirements.
It's not surprising that within the last fortnight D4F have now reduced the margin on ALL FTSE deals to £50 a point and some while ago decided to provide interest on the funds you have in your account. Thank goodness for competition. Now if only they would reduce it to 2 points. I trade both D4F and futures with IB as they still offer a better spread of .5 -1.5 but when its 1.5 you only have to wait seconds and it has moved to 1 or 0.5 again. So if you are trading a shorter time frame then Futures offer a better chance of success.
What I cannot tell you though is if D4F price is better value than some of the other companies that have larger spreads. You would think the obvious choice would be D4F with 3 points. However how much slack is in the price compared to the others I do not know and which are best at filling larger orders.
I daytraded D4F for a while at £60 - £80 a point and found they were very poor at filling orders. Apparently, if you go over £20 they send the order to one of the dealers who has to confirm the market position (liquidity) so your fill can take ages. Often I found that I would get re-quoted. Now I know I will upset some here who will stand up for a SB company but I found it very interesting that I always got a negative re-quote when the position had moved against my proposed deal. But whenever it had moved in my favour they gave me the original price I had requested. I see that as giving them to much of an advantage and quite frankly a form of manipulation. In all the time that I traded over 8 weeks and numerous deals not once and there were many opportunities did I get the benefit from a positive move while waiting for my order to be confirmed (filled).
Yet they would often re-quote me a 2 point move from my requested price at either end so this was costing me at least 4 points per round trip. I found that £25 was about the limit you could go to where your deal was dealt with instantly without the deal being sent to one of there own dealers. On this basis I have little faith in trading with them over £25 a point on a short term trade at least with IB I get instant fills and can take a much larger position without all this trickery. As far as am concerned they already have a wider spread than that of the futures so why adopt this practise for larger deals. It is certainly not serving the customers interests even if everything is above board. They should establish a more professional way to deal with larger deals in order to continue to provide a balanced service for the way they manage to act on smaller orders. While I appreciate £60 - £80 represents a large order within the market I can assure you that in the scheme of things this is very small when you see exactly what orders are being placed on the FTSE. I could understand there performance with something like a £250 plus deal but under £100 seems a bit much.