Spreads & margin
All spread bets have a buy price and a sell price, the difference between them is called the spread.
Guide to spreads
Here’s a quick guide on the things you need to know about spreads:
- The buy price is always higher than the sell price
- The spread will vary from market to market, and can sometimes change depending on market volatility. The wider the spread, the more the market will need to move before you can make a profit
- You can always see both the buy price and the sell price, so it’s easy to understand the spread for any trade
Guide to margin
With spread betting, you don’t actually buy or sell the actual product, you’re just betting on the price movement. For each bet you only need to put up a small amount of the total bet value in order to open that bet.This amount is called margin.
Here’s a quick guide on the things you need to know about margin:
- The margin varies depending on the product you bet on. Margin rates typically range between 1% and 20%
- Trading on margin gives you more profit (and loss) potential because the margin is less than the full value of the trade
- Because markets affect your account in real time, the margin amount has to be maintained throughout the life time of the bet
- If your bet loses money you may need to top up your margin to keep your bet open
Here’s how we calculate margin: Margin = Opening Bet Value x Margin Rate
The Opening Bet Value is calculated as: Opening Bet Value = Opening Bet Price x Stake x Point Multiplier
Here are two platform features that help you manage your risk:
1. If your account value falls below 50% of your total margin requirement, the platform will attempt to notify you that this level has been reached. (The total margin requirement is the sum of margin required for all bets on your account.) Please remember that this notification is only provided as a courtesy and you must not rely on it.
2. With our new transaction based stop loss feature the platform sets a stop loss for each new bet, equal to the margin requirement. If you wish, you can turn off this feature in your account preferences.
Browse our product library to see a full list of margins
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