Spread Bets Examples
This page will be regularly updated with Spread Betting Tips
& Spread Bets Trading Examples, so keep checking back!
It’s the 4th Feb and the UK 100 June is trading at 6512. The official contract expiration is 20th June (Please see market information sheets for market expiration)
| ODL are quoting a two way price in UK 100 June: | ||
| Sell | Buy | |
| FTSE June: | 6510 | 6514 |
| You have two options: (20th June: Market expires at 6700) | ||
 |
 |
You think the market will rise and BUY £10 per point at 6514. |
You think the market will fall and SELL £10 per point at 6510. |
 |
|
You were right to BUY as the market rose higher than your opening trade level. |
Your view to SELL was incorrect as the market rose higher than your opening trade level instead of falling. |
|
|
The spread bet was left open until expiry, therefore ODL will automatically close the bet for you at the settlement price of 6700 |
The spread bet was left open until expiry, therefore ODL will automatically close the bet for you at the settlement price of 6700 |
|
|
Your profit is the difference between the opening price and the closing price multiplied by your stake. |
Your loss is calculated by the difference between the price you sold at and the price you bought atmultiplied by your stake. |
|
Opening Level 6514 |
Opening Level 6510 |
The previous example is an illustration of a trade held to expiration. You are not obligated to leave a position to expiry; you can close the position at any time before the expiry date.
To close an open position you must trade out of that position by obtaining a new quote from ODL Markets then trade an equal and opposite amount to your open position.
For example, if you bought £10 of UK 100 June, and wish to close the entire trade, you must sell £10 of UK 100 June.
If you do not wish to close a position you have the option to ‘roll’ the bet forward to the next contract period. In the case of the example above (UK 100 June) you would have the option to ‘roll’ this contract into the next available future month which would be September (or another month if available). This would entail selling the UK 100 June position while simultaneously buying a September position.
To roll quarterly contracts or for further information on the ‘rolling’ process, please call the dealing desk on +44 (0)20 7903 6363
Spread Betting is a high risk investment and it is possible to lose more than your initial deposit rapidly and substantially. Spread Betting may not be suitable for everyone, so please ensure you fully understand the risks involved.
Spread Betting profits and losses are not currently subject to UK Capital Gains tax, however tax laws are subject to change and depend on individual circumstances.
Please click here for our Risk Disclosure Notice
ODL Securities Limited is authorised and regulated by the Financial Services Authority - Registration number 171487 Member of the London Stock Exchange and NYSE Euronext.
© 2009 ODL Securities Limited.
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