Transaction based stop loss feature
The transaction based stop loss is an important new feature we have added to our spread betting platform.
It's there to help you manage your risk.
- When you open a new bet the platform will set a stop loss for that bet, equal to the margin requirement
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- You can adjust the stop loss level before you place the bet,
by amount or by value -
- You can also change your stop loss after your bet has been opened
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When you have transaction based stop losses enabled, the platform will set a stop loss for every bet you place. This helps you to manage your risk, but cannot eliminate all risk entirely.
If you wish, you can turn off the transaction based stop loss feature in your account preferences. This will enable you to open bets without placing a stop loss order. Of course you can always choose to add a stop loss to any bet, either at the time you are placing the bet or afterwards.
Now, read on to learn more about the risks of spread betting.
Understanding the risks
Remember, stop loss orders can help you manage your risk but they won’t eliminate risk entirely.
Please do take the time to read our risk warning notice for financial betting.
When you spread bet you are betting on the real time movement of a financial market. The markets can move quickly throughout the day and so the value of your account can also change quickly.
To make money from financial spread betting you have to get the market direction right. This goes without saying, but it is equally important that you understand managing your risk.
You can lose more than your initial deposit. The amount of any loss for an individual bet may exceed the amount of margin that you used to enter into that bet. This is a feature of ‘leveraged’ or ‘geared’ instruments – you can lose more than your initial payment.
The bigger the stake, the bigger the risk. The impact of any price movement on your account will depend on the size of your stake, not the amount of margin. A small movement in price may have a large impact on your account if you have bet a large stake.
To understand how much risk you are taking on, it’s important to know how the Opening Bet Value is calculated:
Opening Bet Value = Opening Bet Price × Stake × Point Multiplier
Here’s an example of this calculation in action using a price of 5139.7684
| Price | £1 stake (£) | £5 stake (£) | £10 stake (£) |
|---|---|---|---|
| Point multiplier = 1 5139.7684 |
5,139.77 | 25,698.84 | 51,397.68 |
| Point multiplier = 10 5139.7684 |
51,397.68 | 256,988.42 | 513,976.84 |
| Point multiplier = 100 5139.7684 |
513,976.84 | 2,569,884.20 | 5,139,768.40 |
| Point multiplier = 1,000 5139.7684 |
5,139,768.40 | 25,698,842.00 | 51,397,684.00 |
| Point multiplier = 10,000 5139.7684 |
51,397,684.00 | 256,988,420.00 | 513,976,840.00 |
Knowledge is power
It’s impossible to eliminate risk entirely, but you can use stop loss orders to manage those risks.
Remember:
- Use the transaction based stop loss feature - every time you place a bet the platform will set a stop loss for that bet, equal to the margin requirement
- Always monitor your positions; you can increase or decrease your stop loss at any time
- Do not risk more money than you’re prepared to lose
Please make sure you understand all the risks before you get started.
We highly recommend you practice on our demo account before opening a live account. When you trade on the demo account the profit and loss is virtual but the prices are live so you will get a real sense of the risks involved in spread betting the world’s financial markets.