Spread Betting examples

IMPORTANT: the below examples are for illustration purposes only. Any Spreads or margin requirements are subject to change. Ensure you fully understand the terms of any bet before opening any position. These examples exclude the impact of any financing and dividends.

Looking at an example is a great way of developing a better understanding of how spread betting works.

All our bets essentially work in the same way: we quote a price for a market expiring at some time in the future and you make a bet based on whether you think the market will be higher or lower than our quote by that time.

You decide you want to bet on the short-term direction of the UK 100 index.

Our UK 100 index DFB price in mid March is quoted at 6134 - 6135.

This means you can 'sell' at 6134 or 'buy' at 6135 ('buy' transactions are made at the higher end of the spread and 'sell' at the lower end).

We quote 6134 - 6135

Sell

You think the market is going to fall, so you choose to 'sell'. You decide to risk £10 per point.

You 'sell' £10 per point at 6134.

Against your expectations, the market rises. You opt out to cut your losses and close your bet in case the market moves further against you.

At midday the price we quote is
6152 - 6153

To close a 'sell' bet you simply 'buy' at the top end of the spread.

You buy at £10 per point at 6153

Buy

You think the market is going to rise, so you choose to 'buy'. You decide to risk £10 per point

You 'buy' £10 per point at 6135.

As you predicted, the market rises in the afternoon and you choose to take your profit.

At midday the price we quote is
6152 - 6153

To close a 'buy' bet you simply 'sell' at the bottom end of the spread.

you 'sell' £10 per point at 6152


Your loss is calculated as follows:

Opening price6134


Closing price6153


Difference19


Loss: 19 x £10 = £190


Your profit is calculated as follows:

Opening price6135


Closing price6152


Difference17


Profit: 17 x £10 = £170