Spread Betting Margin
By admin on Dec 11, 2011 | In spread betting
Now what margin is used in spread betting and where's the stop loss placed? Bear in mind that the minimum marginal quantity is 30, you certainly have that. You've got 1000 pounds in your account. The maximum Computer Generated Stop Level is 150. So the stop goes at 80% of either the trading resources or the max CGSL. 80% of the trading resources is 800, so the system will not place your stop at 800 points away. It will go to the max Computer Generated Stop Level.
So we'll get 80% of 150, but of course the margin required will be the 100%. The margin required in Spread Betting is 150, leaving a total of 850 pounds for more trading if you want or you can move your stop loss away, you can, of course, move your stop loss closer if you want. The stop is placed at 120 points away at 4,880.
If you were to use a guaranteed stop loss in Spread Betting, and you bought at 1 pound at a price of 5,000, then the stop is placed 150 points away. Again, you can amend a stop loss that a bit further away, or closer. That explains how the financial spread betting works, and in particular how financial spread betting works on the Capital Spreads system.