Let’s imagine that you’ve been looking into Microsoft as a potential spread bet trading. Early reviews that you’ve seen about its most recent operating system suggest that the share price which you have seen quoted at £52 on the TV news is likely to go up. You’ve made the decision to go to your broker’s website to place your trade in one of your spread bet accounts.
A Successful Trade On Microsoft – Going Long
You’ll notice straight away there are 2 prices for Microsoft – 5202 is the price to “sell” and 5198 is the price to “buy”.
You make the choice to purchase at 5202 for £10 a point (1 point = 1p). That means for each point that the market goes up, you gain £10. You are proved to be correct in your prediction. Microsoft’s new operating system does well and over the following weeks there is a rise in the Microsoft buy price up to 5306 and in its sell price to 5302. You want to take your profits and therefore you choose to sell your shares at 5302.
As your bet was £10 for each point, you have made a profit of £10×100=£1000
Also in our ultimate guide to spread betting, it covers:
- Ten Good Reasons To Try Spread Betting
- The Potential Risks
- Making A First Trade
- Going Short – Winning A Trade From A Falling Market
- 5 Ways To Make A Profit From The Market
- Spread Betting’s Hidden Costs
- Choosing The Right Provider Of Spread Betting Services
- Glossary Of Spread Betting Terms
- Compare spread betting brokers, features, accounts and markets