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Where to Find Live Spread Betting PricesIf you open a spread betting account† with any of the following companies they will let you access their live spread betting prices.
† Note that accounts are subject to terms and conditions. It’s normally free to open a spread betting account and to access the real-time prices however if you trade then please be aware of the risks.
24 Hour Spread Betting PricesIf you are looking for 24 hour spread betting then you should be aware that firms like Financial Spreads currently offer a wide range of spread bets on many of the major markets from Sunday evening all the way through to Friday evening. For more details see 24 Hour Spread Betting.
How Spread Betting Prices Work on IndicesDow Jones Index Example – as with many financial markets, you are able to speculate on indices, like the Dow Jones, to rise or fall.
Looking at a spread betting website like InterTrader, you can see they are currently pricing the Dow Jones Rolling Daily market at 13153.0 – 13154.0. As a result, an investor can spread bet on the Dow Jones market:
Going higher than 13154.0, or
Going lower than 13153.0
When making a spread bet on the Dow Jones index you trade in £x per point. So, if you chose to risk £2 per point and the Dow Jones moves 36 points then that would change your P&L by £72. £2 per point x 36 points = £72.
Rolling Daily Index MarketsOne important thing to note is that this is a ‘Rolling Daily Market’ and therefore there is no closing date for this market. You do not have to close your position, should it still be open at the end of the trading day, it just rolls over into the next day.
If your trade does roll over and you are speculating on the market to:
Move higher – then you usually pay a small overnight financing fee, or
Move lower – then you’ll usually receive a small credit to your account
Our article Rolling Daily Spread Betting goes into more detail about Rolling Daily Markets and includes a fully worked example.
Dow Jones Rolling Daily – Indices Spread Betting ExampleNow, if you consider the above spread of 13153.0 – 13154.0 and make the assumptions:
- You’ve done your stock market analysis, and
- Your analysis leads you to feel that the Dow Jones index will increase and move higher than 13154.0
So, you win £4 for every point that the Dow Jones index pushes above 13154.0. Conversely, however, it also means that you will lose £4 for every point that the Dow Jones market moves lower than 13154.0.
Thinking of this in a slightly different way, if you buy a spread bet then your P&L is calculated by taking the difference between the final price of the market and the price you bought the market at. You then multiply that price difference by the stake.
With this in mind, if after a few sessions the index started to increase then you might want to close your trade and therefore lock in your profits.
So if the market rose then the spread, set by the spread betting company, might move up to 13183.6 – 13184.6. In order to close your spread bet you would sell at 13183.6. As a result, with the same £4 stake this trade would make you a profit of:
Profit = (Final Price – Opening Price) x stake
Profit = (13183.6 – 13154.0) x £4 per point stake
Profit = 29.6 x £4 per point stake
Profit = £118.40 profit
Financial spread trading doesn’t always go to plan. With the above, you had bet that the index would rise. Naturally, it can also fall.
If the Dow Jones index began to drop then you could choose to close your trade in order to restrict your losses.
So if the spread pulled back to 13127.7 – 13128.7 you would close your spread bet by selling at 13127.7. As a result, your loss would be:
Loss = (Final Price – Opening Price) x stake
Loss = (13127.7 – 13154.0) x £4 per point stake
Loss = -26.3 x £4 per point stake
Loss = -£105.20 loss
Note: Dow Jones Rolling Daily market correct as of 25-Oct-12.
How Spread Betting Prices Work on SharesLloyds Bank Example – if you want to invest in firms such as Lloyds Bank then one solution is to spread bet on the Lloyds Bank share price.
Looking at a website like Tradefair, we can see they are pricing the Lloyds Bank Rolling Daily market at 41.3p – 41.6p. As a result, an investor can spread trade on the Lloyds Bank shares:
Moving higher than 41.6p, or
Moving lower than 41.3p
Whilst financial spread betting on UK equities you trade in £x per penny. As a result, if your stake was £3 per penny and the Lloyds Bank share price changes by 24p then that would make a difference to your bottom line of £72. £3 per penny x 24p = £72.
Note: As with the Dow Jones example above, this is a Rolling Daily market (see above for details).
Lloyds Bank Rolling Daily – Shares Spread Trading ExampleSo, if we take the spread of 41.3p – 41.6p and make the assumptions:
- You have completed your market research, and
- Your analysis suggests that the Lloyds Bank share price will rise above 41.6p
This means that you make a profit of £25 for every penny that the Lloyds Bank shares go higher than 41.6p. Of course, such a bet also means that you will lose £25 for every penny that the Lloyds Bank market falls lower than 41.6p.
Looking at this from another angle, if you ‘Buy’ a spread bet then your profits (or losses) are worked out by taking the difference between the final price of the market and the price you bought the spread at. You then multiply that difference in price by the stake.
If after a few sessions the stock started to rise you might decide to close your spread bet in order to secure your profit. As an example, should the market rise, the spread, set by the spread trading firm, might move up to 45.3p – 45.6p. You would close your position by selling at 45.3p. Accordingly, with the same £25 stake you would calculate your profit as:
Your profit / loss = (Settlement Price – Opening Price) x stake
Your profit / loss = (45.3p – 41.6p) x £25 per penny stake
Your profit / loss = 3.7p x £25 per penny stake
Your profit / loss = £92.50 profit
Trading equities, whether by spread trading or otherwise, is not always easy. With this example, you wanted the share price to increase. Of course, it could decrease.
If the Lloyds Bank shares had started to drop then you might decide to settle/close your position in order to restrict your losses.
Should the market fall back to 37.2p – 37.5p then you would sell back your position at 37.2p. If so, your loss would be calculated as:
Your profit / loss = (Settlement Price – Opening Price) x stake
Your profit / loss = (37.2p – 41.6p) x £25 per penny stake
Your profit / loss = -4.4p x £25 per penny stake
Your profit / loss = -£110.00 loss
Note: Lloyds Bank Rolling Daily spread betting price correct as of 25-Oct-12.
Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.