Compared to spread betting on other instruments, trading on
options can be complicated and carries additional risks.
Please refer to our Spread Betting on
Options information page.
Buying a Call option on the UK 100.
If the Finspreads quote for the June UK
100 Future was 6100 – 6106 and you believe that the
market will rise:
Rather than buying the June UK 100 Future at 6106,
you ask for a price on a 6200 June call option.
Finspreads quotes you a price of 40 – 45.
You decide to buy £10 per point at 45 (the offer price), giving
you a maximum loss of £450 (£10 x 45).
A week later the UK 100 has risen and you decide to
take your profit.
Finspreads quotes 100 – 108 for the 6200 June call option.
To close your position you sell the June 6200 call option at
100, and your profit is calculated as follows:
100 - 45 (opening price of your trade) = 55 points
55 points x £10 (stake) = £550 profit.
Buying a Put option on the UK 100:
If the Finspreads quote for the June UK
100 Future was 6250 – 6256 and you believe that the
market will fall:
Rather than selling the June UK 100 Future at 6250,
you ask for a price on a 6100 June put option.
Finspreads quotes you a price of 35 – 40
You decide to buy £10 per point at 40 (the offer price)
A week later the UK 100 has risen and the June UK
100 Future is now 6320 - 6326
Finspreads quotes 20 – 24 for the June put option.
As the option still has some weeks until expiry, you let the
position run. The UK 100 carries on rising and on expiry
of your put option it stands at 6450.
Your option finishes worthless and your loss is calculated as
follows:
40 (opening price of your trade) x £10 (stake) = £400 loss