Example of Spread Betting, courtesy of CityIndex What does Going Long and Short Mean in Spread Betting? Your stake was £10 per point, so you made a total of £100. As you opened the trade at £252, this represents a profit of 10 points. This is great for your trade, as you purchased a buy order. You decide to stake £10 per point.Ī few hours after placing your trade, IBM stocks are now valued at £262. ![]() ![]() In this example, each dollar that IBM moves in the market will represent 1 point. Moving on, you now need to think about how much you want to stake per ‘point’. We’ll cover the spread in more detail further down. This means that the ‘spread’ is 2 (the difference between £250 and £252). The current ‘sell’ price is £250, and the ‘buy’ price is £252. This means that you are going to place a ‘buy’ order, which means you believe the price will increase. ![]() After performing some analysis on the company, you feel that IBM is heavily undervalued. Let’s say that you want to speculate on the price of IBM stocks. You stand the chance of losing your entire investment, so do tread with caution. Note: The risks of spread betting should not be understated.
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