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 The best way to understand
how spread betting works is to look at some example
trades.
A spread bet is simply a way to speculate on the price movement of
an underlying instrument. You can speculate on movements
in equities, indices, currencies, commodities, bonds, options
and interest rates.
For every spread bet, the price movement of the underlying
instrument is measured in points, and you place your bet against
every point movement.
Whichever instrument you choose, Finspreads will quote you two
prices – the bid (the price you sell at, and the lower of the
two prices), and the offer (the price you buy at, and the higher of
the two prices).
To open a bet, you simply choose your instrument, and choose the
amount of money that you would like to bet against every point
movement.
To close a bet and realise your profit or loss, you simply place
an opposite bet on the same instrument.
The profit or loss that you make will be the difference, in
number of points, between the opening bet and the closing bet,
multiplied by your stake. So if you bet £5 per point, and the
price movement was 10 points, you would make (or lose) £5 x 10 =
£50
The following example trades provide more detail on how this
works for the different instruments that you can trade.
Shares
Indices
Currencies
Commodities
Bonds and interest rates
Binary bets
Options
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