For example, £1 for every point change in the FTSE 100. There will be a spread which is the difference between the buy and sell price. In this example if the belief was that the FTSE 100 will increase in value, you go ‘long’, and the spread bet will be opened at the buy value. For every point the FTSE 100 increases a £1 gain will be made, i.e. if the FTSE 100 rises by 10 points, then you will be £10 in profit. If the FTSE 100 had fallen by 10 points, then you would face a loss of £10.
Investment in CFD and Spread Betting products involves a high degree of risk and are not suitable for all investors. It’s possible to quickly lose substantially more than your initial deposit and you may be required to make further deposits at short notice to maintain open positions. Trading on margin, whilst allowing you to maximise gains, also maximises potential losses and a relatively small movement in a currency can have a disproportionately dramatic effect on your trade. You may be called upon to deposit substantial additional margin, at short notice, to maintain a trade. You should not engage in trading these leveraged products unless you understand the nature of the transaction you are entering into, the risks involved and the true extent of your exposure to the risk of loss. Click for more info.