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How to spread bet

Please note that any trading scenarios shown in this material are for illustrative and educational purposes only. They should not be considered recommendations or advice. Most examples do not factor in fees and taxes. These costs will impact the outcome of your transaction.

Choosing an option

With spread bets you can choose:

A buy position or to "go long"

This means you enter the market thinking the price of the instrument will rise.

A sell position or to "go short"

This means you enter the market thinking the price of the instrument will fall

Reading a spread bet quote

If you want to buy, you would enter the position at the buy price. In this example it's 5136.5.

If you want to sell, you would enter the position at the sell price. In this example, it's 5135.5

The stake is how many pounds you bet per point the market moves. For example, a stake of £1 means for every point the market moves in your favour, you make £1 (and conversely, if it moves against you, you lose £1). If your stake was £10, you would gain - or lose - £10 per point.

Why are the prices in the quote different?

The difference between the first and second rate is called the spread. This is Tradefair's price for entering the trade. The value of the spread varies depending on the financial product you use in your spread bet. For example, UK100 spread is as low as 1 point. When you enter a spread bet at Tradefair, all you pay is the spread, no additional fees apply.

To give you a better idea of how these work, let's see these positions in action:

Our UK100 quote is 5135.5-5136.5. This means you can 'sell' at 5135.5 or 'buy' at 5136.5.

'SELL' or 'GO SHORT'

You think the market is going to fall, so you decide to 'sell' at 5135.5 and risk £10 per point.
Contrary to your expectation, the market actually rises.
You decide to cut your losses and close your bet in case the market rises any further.
Our UK100 quoted price is now 5155.5-5156.5.
To close the bet you simply 'buy' £10 per point at 5156.5.

Your loss is calculated as follows:

Opening price 5135.5

Closing price  5156.5

Difference 21

Loss 21 x £10 = £210

'BUY' or 'GO LONG'

You think the market is going to rise, so you decide to 'buy' at 5136.5 and risk £10 per point.
As you predicted, the market rises and you decide to collect your profit.
Our UK100 quoted price is now 5155.5-5156.5.
To close the bet you simply 'sell' at 5155.5.

Your profit is calculated as follows:

Opening price 5136.5

Closing price 5155.5

Difference 19

Profit 19 x £10 = £190

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