Spread Betting Terms

The names of the currency pairs for the transactions to Spread Betting ending in "-sb" (EURUSD-sb, GBPUSD-sb, etc.).

Transactions for the purchase of Buy is committed to Ask price closed on the Bid price.
Transactions for the sale takes place on the Sell Bid prices closed down on the Ask price.

When you are trading in CFD, your PL you change the price of one item is equal to the cost of one item. To increase the PL as a multiplier you are using the Volume, ie number of "units" (stocks, barrels, ounces) that you sell or buy.

PL, it is FPL (floating profit / losess) for cfd, it is considered as last_trade price * volume * convert rate.

Accordingly, if you change the price (last trade) then pl change.

When trade SB factor is your bet (bet) on the change in the price of an asset at one point. If you draw an analogy - you bet - this is the number of lots that you buy.

The principle of performance is the same as a CFD. SB is really a type of contract for difference. However, the main difference between the SB and the contract for difference (CFD) is that the price of buying and selling in the markets rather SB includes the spread of GFT Global Markets, as the establishment of any commission. SB includes any commission.

Example 1:

Quote of XYZ is $ 100.00 - $ 100.05. Do you think that XYZ will grow. Do you buy 500 x XYZ.cfd $ 100.05. The price rose to XYZ 100.10-100.15. You sell 500 XYZ.cfd x 100.10.

Your income (excluding commission): 500 * (100.10 - 100.05) = 500 * $ 0.05 = $ 25

You can do the same thing, is not buying SFD, but SB, making a bid (buying) $ 5 per item. You could have bought for 100.05, sold at 100.10, earned 5 points. Your bid is $ 5 per item. Your PL = 5 * $ 5 = $ 25.

Example 2: SB on securities

Quotas set for GFT fluctuations XYZ, is 449,3-455,7.

XYZ tomorrow will announce its results for the second quarter. Assuming that the results are better than expected, you buy, make a bet £ 25. This means that for every penny to which the proposed stock price rises above the mark you will receive a 455.7 £ 25, and every penny to which the price falls, you lose £ 25. (This is equivalent to buying 2500 shares directly to the main market).

Night carryover fund (rollover)

When you hold the position of the evening, your bid «reopens», ie rose, and the next day again was called on the closing price (as determined from GFT), thus the outcome of profits or losses, as well as rolling fund to your account will be shortly after the closure of stock markets.

The calculations are made as follows: f = (sxpxr) / d, where

f = daily cost of financing

s = your bet (£ 25)

p = price of the closure, a GFT Global Markets (456 pence)

r = the corresponding LIBOR rate plus 300 basis points for long positions, or MINUS 300 points for short positions (4.50% +3.00%) = 7,50%

d = number of days (365 for UK shares, 360 for all others)

Long position (buying) deducted the cost of financing.
Short positions (selling) loans to finance the costs.

Thus, the financial outcome will be debited to your account equal to:

(£ 25 x 4.56 x 7.5%) = £ 8.55

«Reopening» was done at the price of 456 pence, so that your bid was closed at around 456 pence, you receive a profit £ 7,50; rate was re-opened at around 456 p.

At 7.00 the next day the results of XYZ actually were better predicted. At 8.30 am shares traded on the 476-477. Price set for GFT fluctuations XYZ, is 475.3 - 477.7.

You decide to take advantage and sell for £ 25 at around 475.3, so you close your bet.

You get profits of $ (475.3 - 456) x your stake £ 25 = £ 482.50. (After admission to the financial results and a profit of «pereotkrytiya», you get a net profit of (482.50 - 8.55 + 7.50) = £ 481.45).

Example 3: SB on metal

June. The prices of gold has recently risen, as speculators inflate them higher and higher. You decide that prices will continue to grow, and check the price of gold at the GFT.

The price of gold 680,0-680,7 GFT.
GFT price of gold is based on the main futures contracts.

You buy at ₤ 20 at around 680.7. And here you have to draw the attention that you put «in 0,1», ie If gold went up from 680.0 to 681.0, then it went up by 10 points, which corresponds to the profit of ₤ 200, with a rate of ₤ 20.

This rate, if it will remain open, will expire (ie, will be automatically closed) on 18 August. However, by early July, the price of gold exceeds ₤ 700, and our price is now 702,5-703,2.

You decide to close some of its positions and sells for ₤ 10 at around 702.5.
This will bring you profit (7025 - 6807) x your stake £ 10 = £ 2180.

You left open the remainder of your rate of ₤ 10 to the end of the market in August. Unfortunately, by that time, intervened suppliers, and the market ended at around 675.5.
With this rate of ₤ 10, you have suffered damages in the amount of (6807 - 6755) x 10 = £ 520.

Total trades:
SB on methodology - ₤ 20
Total income - £ 1660

As a result, the rate of ₤ 20 yielded a return of £ (2180 - 520) = £ 1660.

Key points when trading Spread Betting:

1. With Spread Betting CFD at virtually no difference. Who else likes to trade. In the UK there are nuances in the tax: for the CFD and SB trade may be different ways of declaring income, etc. In this regard, for example, at GFT UK trade SB user opens a separate account.

2. SB is not subject to commission. So what's earnings as a broker? The wide spread. For example at this point in the GFT for IBM.cfd quotation 129.98 - 130.00, and the IBM.sb 129.95-130.03

3. Both the CFD and Spread Betting - odinnakovy set of tools.