Examples
Example of a Spread Bet
If the FTSE 100 Share Index is currently trading at 5278, Capital Spreads may quote 5277 (the sell price) - 5279
(the buy price). This quote (which has a 2 point spread) allows you the opportunity to bet that the value of the
FTSE will fall or rise. If you believe that the value of the FTSE will fall, you should Sell (or make a down bet)
at 5277 or if you think the FTSE will rise, you would Buy (or make an up bet) at 5279.
Assuming you decide to sell, the following example is based on a bet of £5 per point movement:
The market falls and you decide you would like to realise your profit. The FTSE 100 is trading at 5154 and our quote is 5153-5155. You will need to make a buy bet at 5155 to close your original sell bet. Similarly, if you had opened your position with a Buy bet, you would need to Sell to close.
In the example above if you close your position with a buy bet as quoted by Capital Spreads, your winnings would be calculated as follows: 5277 - 5155 = 122 x £5 = £610.
Obviously, if the market begins to rise above the level at which you sold then your trade will begin to incur a loss. This is calculated in the same way as your profit.
If you are new to Spread Betting we strongly recommend you open an online Demo Account [link to form] and refer to our online User Manual for instructions on how to make a bet.
Online Trading
Capital Spreads online trading is easy to master. You can observe our live prices before you trade. Then, select the
market of your choice and enter your stake into the appropriate field. A trading "ticket" or pop-up box will be created
and a live sell/buy price is quoted. This price will change as the market fluctuates.
If you wish to buy, click on the Buy button. Once your trade is activated, an online ticket will appear on your screen detailing all of the information concerning your trade (the prices, stake, market, action (buy/sell), ticket number, and expiry details) - this information will also be sent to you via email. You can print this information if you wish.
You will also be given an automatic stop level, which indicates where our system will stop and close your position (you may amend this stop level at the time you make your trade). All stops are on an "our quote" basis, which means that your position will be closed at the Capital Spreads price quote and not the live market price level. Stop-Losses are not guaranteed.
Example Of An Online Bet
The Capital Spreads Barclays spread quote might be 499.3-503.0. If you believe that the share-price will rise over the next 3 months, you
would "buy" at 503.0. You need to decide your stake and then, click on the Trade button. For this example, lets say you choose a stake of
£2 per penny movement.
This means that you will receive £2 for every penny the share price rises. If the share Capital Spreads quote for Barclays rises to 511.0-513.5 you may decide you want to close your position to realise the profit.
A sell bet always closes a buy bet, and vice versa. Alternatively, you can leave the bet to expire, when your bet will be automatically closed.
If, however, the share value falls and you do not sell to close, your bet will close if it reaches your Computer Generated Stop Level (CGSL) or Stop-Loss level of your choice, therefore ensuring that you do not incur excessive losses.
The previous example shows that you opened your bet at 503p and that when the market fell, the trade was automatically closed by a CGSL at 453p. The maximum loss on this bet was £100 (503.0 - 453 x £2 = £100). As the graph shows, the share price continued to fall, whilst the Stop-Loss ensured that further losses were not generated.
If you are new to Spread Betting we strongly recommend you open an online Demo Account and refer to our online User Manual for instructions on how to make a bet.
7 Subject to paragraph 10.2 and clause 13 in our Terms and Conditions.
Trade Confirmation
You will receive confirmation of any action on your account (any trade, market order, order amendment, card deposit etc) by email. Therefore, a personal
email address is mandatory. Please contact us immediately if you discover a discrepancy. You can view your "statement of account" online, at any time.
To calculate the minimum amount of cash you require to open a new position, multiply your stake by the Minimum IMR, i.e. for the Daily FTSE the Min IMR is 30. If you bet £5 per point, you would need a minimum of £150 in your account to open this position. For more information about IMR's please review our Product Information.
What Is Margin?
Margin is the amount of money you must have in your account to satisfy Capital Spreads that you are able to honour your debt should your bet lose money.
The amount of margin required can be calculated simply by using our Product Information sheets, which you can access here.
What Is The Min IMR?
The Min IMR refers to the Minimum Initial Margin Requirement or initial deposit required to open a bet. It is a way of calculating the minimum funds required
to open a new position. If the Min IMR on a market is 50 and you wished to make a bet £5/point, you would require a minimum of £250 in your account
to open a new position.
We will then generate a stop-loss that reflects 80% of the funds available on your account or 80% of the Max CGSL, (see details below). You can adjust/amend your stop-loss to whatever level you desire (subject to the funds on your account). Every product has a minimum stop level that limits how close you may place any stop.
What Is The Max CGSL?
The Max CGSL (Computer Generated Stop Level). This is the maximum figure used to automatically allocate a stop-loss on
newly opened positions. If you have sufficient funds to cover the CGSL on deposit, the Trading System will assign a
stop at a point 80% of the funds on your account, up to the CGSL. Otherwise, the system will allocate a stop-loss
calculated as 80% of the funds available in your account.
For example, if you have £2000 in your account and you trade the Daily FTSE at £10 per point, the system will automatically allocate a stop-loss of 100 points (because the Max CGSL for Daily FTSE is 125 and 80% of 125 is 100). The maximum risk on a £10 bet would therefore be £1000, even if you have £2000 on your account. You can always amend your stop-loss (move it further away, or bring it closer) assuming you have sufficient funds on your account.
Please note that we hold an additional 25% of your funds to allow for slippage or a market gap. We do not offer guaranteed stops and therefore you could lose more than your initial deposit should a market gap through your stop level due to volatile markets or because of movements in the underlying markets during the hours when Capital Spreads is closed and does not subsequently offer a quote. If you require more information, please contact us.
What is the "Net Change" figure displayed on your website?
This figure is based on our spread bet quotes and not the underlying market value. It shows the number of points that our
quote for that product has moved since the close of business the previous day.
