With a quarterly bet
In this example we use the UK 100 Index which
represents the top 100 companies, by market capitalisation, traded
on the London Stock Exchange. You should read this example in
conjunction with our Spread Betting
on Indices information page.
If the actual December UK 100 Future in the
market was trading at 6202.5 / 6203.5
Finspreads quotes 6200 / 6206
The Finspreads quote reflects the cost trading and the cost of
providing a price for the UK 100 Index until the quarterly bet
expires. With quarterly bets, all financing and trade costs are
built into the spread
Depending on your expectations for the UK 100
Index, you could either:
A: Buy the UK 100 December at 6206 (the offer
price) if you expect it to rise, or;
B: Sell the UK 100 December at 6200 (the bid
price) if you expect it to fall
On expiry, the UK 100 December
expires at 6310.
If you were to trade £5 per point and hold the position to
expiry:
Result A:
You were correct in thinking that
the UK 100 would rise and your profit is calculated
as follows:
6310 (market expired) - 6206 (opening price of your trade) = 104
points
104 points x £5 (stake) = £520 profit
Result B:
You were incorrect in thinking that the UK
100 would fall and your loss is calculated as follows:
6310 (market expired) - 6200 (opening price of your trade) = 110
points
110 points x £5 (stake) = £550 loss
In this example the bet was held until expiry, but you can close
an open bet at any time to realise your profit or loss.
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