Share Spread Betting allows market participants the opportunity to take a position on a levered basis on a particular stock
Daily Funded Bets on shares are offered at extremely narrow spreads, giving ideal flexibility and control over the short-term.
Here's an example
Opening the Position
There are rumours circulating at 8am that BlackRock is considering a takeover bid for hedge fund firm Man Group. The price
IGIndex are quoting for Man Group is 233.15–234.85, and you think that the takeover will have a positive effect on the share price, so you decide to ‘buy’ £50 a point at 234.85, the offer price.
Closing the Position
The rumours about an impending takeover gain momentum and Man Group’s share price rockets as a result. Just before midday the IGindex price stands at 244.15–244.85 and you decide to take your profit by ‘selling’ at 244.15, the bid price. The profit on the position is calculated as follows:
Profit on deal
Closing level 244.15
Opening level 234.85
Difference 9.3
Profit: 9.3 x £50 = £465
Remember, spread betting is a leveraged product which can result in losses in excess of your initial deposit. Had the market moved in the opposite direction, you would have lost £50 for every point it fell below 234.85.
If you had felt that Man Group's stock would continue to rise on the following day, you could have chosen to roll your bet.
If you want to learn more about spread betting equities we can recommend IG Index's share spread betting course.