Sector DFB: Banks
Our sector DFBs are an excellent way to gain exposure to a particular industry, and the spreads on all our UK sector DFBs are exceptionally tight – just 0.2%.
In this example, you decide you would like to bet on the short-term direction of the Banks.
Our DFB price for the Banking sector is quoted at 4934 – 4944.
This means you can open a ‘sell’ bet at 4934 or a ‘buy’ bet at 4944 (‘buy’ transactions are always made at the higher end of the spread and ‘sell’ transactions at the lower end).
Sell
You think the market is going to fall, so you choose to ‘sell’. You decide to risk £15 per point.
You ‘sell’ £15 per point at 4934
As you predicted, the market does indeed start to drop. By the afternoon you have a good running profit and choose to close the position.
The price we are now quoting is
4862– 4872
To close a ‘sell’ bet you simply ‘buy’ at the top end of the spread.
You ‘buy’ £15 per point at 4872
Your profit is calculated as follows:
| Opening price | 4934 |
| Closing price | 4872 |
| Difference | 62 |
Win: 62 x £15 = £930
Buy
You think the market is going to rise, so you choose to ‘buy’. You decide to risk £15 per point.
You ‘buy’ £15 per point at 4944
Against your expectations, the market starts to fall. After running your position for a short time, you choose to cut your losses and close the bet as you feel the market may move even further against you.
The price we are now quoting is
4884 – 4894
To close a ‘buy’ bet you simply ‘sell’ at the bottom end of the spread
You ‘sell’ £15 per point at 4884
Your loss is calculated as follows:
| Opening price | 4944 |
| Closing price | 4884 |
| Difference | 60 |
Loss: 60 x £15 = £900