It’s been a while since we’ve done a spread betting example so I throught I’d run through a quick example from a FTSE 100 company.

We’re still in the middle of doing examples for every FTSE 100 company, to see the latest examples go to >> spread betting on FTSE 100 companies

How to Spread Trade on Shares

The current price of the AstraZeneca (June) market is 2009.0p - 2016.8p with FinancialSpreads.com. This ‘June’ market expires on 17-Jun-08.

That means you can spread bet on AstraZeneca shares settling:

a) Above 2016.8p, or
b) Below 2009.0p

on the closing date for this market (17-Jun-08).

When UK equities spread trading, you trade in £x per penny, where a penny is 1p of AstraZeneca share price movement.

Eg if your stake was £4 per penny and the AstraZeneca shares move 10p then that would be a £40 swing to your profit/loss.

AstraZeneca Financial Spread Trading Example

Taking the above AstraZeneca spread of 2009.0p - 2016.8p, let’s say that, after your market research you feel that the AstraZeneca shares will close above 2016.8p on 17-Jun-08.

Therefore you buy at 2016.8p for a stake of your choice, eg £2 per penny.

Your profit is calculated by taking the difference between the final value of the shares and your ‘Buy’ price of 2016.8p and then multiplying that by the stake per penny

So let’s say that market closes at 2110p, if so:

Your profit / loss = (2110.0p - 2016.8p) x £2 per penny stake.

Your profit / loss = 93.2p x £2 per penny stake.

= £186.40 profit.

You can lose though:

If the market didn’t work as expected and had AstraZeneca shares gone against your trade and closed a lower at 1910p, then you would have lost on this spread bet.

Your profit / loss = (1910.0p - 2016.8p) x £2 per penny stake.

Your profit / loss = -106.8p x £2 per penny stake.

= -£213.60 loss.

Good Luck

BD

Clean Financial - Spread Betting