Gold | Financial Spread Bet | IG Index | Example: Gold

It is early January 2010 and we are quoting 1128.7 – 1129.8 for February Gold, which includes our spread of 0.6 plus market spread.

You think that the price of gold is set to rise but you feel that you want to limit your risk potential.

You choose to 'buy' $20 per point at 1129.8. For guaranteed risk protection, the Controlled Risk premium of 0.3 is added to the ‘buy’ quote, so your opening price is 1130.1.

You want to limit your losses to $400 so you put your Guaranteed Stop 20 points below your opening level, at 1110.1. The deposit required for this kind of bet equals the maximum amount you can lose: in this case, $400.

On the next day the market rises, and by the midway point of the month we are quoting 1157.8 – 1158.7. You close your bet by 'selling' $20 per point.

The result

Profit: 27.7 x $20 per point = $554