How To Spread Bet
Twowayspreads makes placing orders easier. You speculate on which way the market
is likely to go and buy or sell accordingly. The buy or sell is a bet, and you are
simply betting on the actual price movement of your market. You never actually own
the instrument you “buy”.
You can place bets either by telephoning our dealing desk or betting on our online
trading platform.
Please view our examples below to see how it works. You will also find some more
detailed examples and comparisons to the left.
Going long
Going long, or placing an up bet, is when you speculate on the price of your chosen
market rising in the future. In Spread Betting, you bet per point movement. With
UK shares, this is done per penny. So for each penny your
chosen share rises, you will make your stake. Please see the example below:
- You think the results for UK PLC are going to be better than expectations. Twowayspreads
are quoting a price of 500 – 501.
- You buy £10 at 501. This means that for each penny movement, you make or lose £10.
This is the exact equivalent of buying 1000 shares.
- You are correct, and UK PLC’s results are far better than expected, with the share
price rallying 50p to 550 – 551. You decide to close the position and take your
profits:
- You sell £10 at 550
- This gives you a profit on the bet of 49 points. 49 (Points) x £10 (Stake) = £490
profit.
Going Short
Going short, or placing a down bet is when you speculate on the price of your chosen
market falling in the future. In Spread Betting, you bet per point movement. With
UK shares, this is done per penny. So for each penny your
chosen share or index falls, you will make your stake. Please see the examples below:
Example 1
- You think the economy is flagging and expect the value of shares to fall. You therefore
want to Short and place a down bet on the UK 100 Index. Twowayspreads are quoting
a price of 4500 – 4502.
- You sell £10 at 4500. This means that for each penny movement, you make or lose
£10.
- You are correct, and the UK 100 index falls, wiping 2% (90 points) off the value
of the UK’s 100 biggest companies. Twowayspreads is now quoting the price of 4410
– 4412. You decide to close the position and take your profits:
- You buy £10 at 4412
- This gives you a profit on the bet of 88 points. 88 (Points) x £10 (Stake) = £880
profit.
Example 2
- You think the economy is flagging and expect the value of shares to fall. You therefore
want to Short and place a down bet on the UK 100 Index. Twowayspreads are quoting
a price of 4500 – 4502.
- You sell £10 at 4500. This means that for each penny movement, you make or lose
£10.
- You are wrong, and the UK 100 index rises 50 points. Twowayspreads is now quoting
the price of 4550 – 4552. You decide to close the position:
- You buy £10 at 4552
- This gives you a loss on the bet of 52 points. 52 (Points) x £10 (Stake) = £520
loss.
Further Information:
We have a number of other financial spread betting examples including,
hedging, “Spread Betting vs Shares”
and “Spread Betting vs CFDs”.
You can also try placing some trades with a free demo spread betting account. Please
click here to register.