FTSE example | How to Spread Bet on the FTSE | IG Index

The best way to understand spread betting is to go through an example. All our bets work in basically the same way, whether you are day trading or taking a more long-term view.

We make a quote for the price of a market at some date in the future, for example, the FTSE 100 in March 2009. You decide whether the market will be higher or lower than our quote by that time. You can also choose bets with a daily time frame, for example on today's FTSE settlement. This is ideal for day traders who wish to capitalise on immediate volatility.

Suppose you want to bet on the short-term direction of the FTSE 100 At 9.30am on 28 January 2009 our Daily quote is 4249 - 4251 This means you can 'buy' at 4251 or 'sell' at 4249 ('buy' transactions are made at the top end of the spread and 'sells' at the lower end) We quote 4249 - 4251

Sell You think the market is going to fall, so you 'sell'. You decide to risk £10/point You 'sell' £10/point at 4249 The market rises in the afternoon. You decide to cut your losses by closing your bet at our current Daily FTSE price At 2pm we quote 4295 - 4297 To close a 'sell' bet you simply 'buy' at the top end You buy £10/point at 4297	Buy You think the market is going to rise, so you 'buy'. You decide to risk £10/point You 'buy' £10/point at 4251 The market rises in the afternoon. You decide to let your bet run to expiry The FTSE continues to rise towards the end of the day and your bet is closed at the official FTSE closing price The settlement price is 4307
Loss is calculated as follows: Closing price 4297 Opening price 4249 Difference 48 You lose 48 x £10 = £480	Profit is calculated as follows: Closing price 4307 Opening price 4251 Difference 56 You win 56 x £10 = £560