Jump to content

Leverage in Spreadbetting


Recommended Posts

Hi guys,

New to this but was looking to start spread betting using £10 per point using all my own money (ie no leverage). I've been told you cannot do this and that leverage is obligatory on Indices at 20x (5% margin). Not really sure why but hey.....

So instead, if I just bet 50 pence per point, and then use the obligatory 20x leverage the bet in my mind will be exactly the same £10 per point (50p x 20 = £10). Is this how it works or am I missing something? I cannot get a clear answer from the online IG support on this one. 

Thanks in advance.

Link to comment
On 10/09/2020 at 14:46, Woodlandbear said:

Hi guys,

New to this but was looking to start spread betting using £10 per point using all my own money (ie no leverage). I've been told you cannot do this and that leverage is obligatory on Indices at 20x (5% margin). Not really sure why but hey.....

So instead, if I just bet 50 pence per point, and then use the obligatory 20x leverage the bet in my mind will be exactly the same £10 per point (50p x 20 = £10). Is this how it works or am I missing something? I cannot get a clear answer from the online IG support on this one. 

Thanks in advance.

Thanks for your post. 

If you put down £0.50 per each one point movement in the direction you selecting will gain you £0.50. Say you wanted to trade on the FTSE (and considering you weren't using stops) you would have to put down (price of FTSE x £0.50 x margin factor). That is your holding deposit then the market would move round and your profit/ loss on the FTSE would have an impact on your available funds. 

If you want to have it that every point movement gains you £10 you have to use £10 per point. Leverage means that instead of purchasing the underlying asset you put down a percentage of the consideration of the trade then depending on which way the market moves you gain or lose that money. 

If what you mean was you wanted to invest £10 on indices without leveraged this isn't something we can offer. 

I hope this helps. 

Link to comment

Hi Woodland bear, I understand where you are coming from, you are trying to  do the equivalent of a “ cash secured put “ in option trading. 

You could actually do what you want pretty much , as long as the index/ share you want to bet on isn’t too high for you to “ cover” with cash in your account 

 

eg say the ftse 100 is 6026, if you had £6026 , this would cover a £1 per point bet .....alternatively, if you wanted to bet on a share that was 85p you would only need £85 in your account to cover a £1 a point bet.

However if you don’t use any “leverage “ and your cash covers your bet as described above, you are no better off than just buying the actual share or index tracker

Imo it is worth using some leverage to hopefully drive your profits higher....but too much and you risk blowing up your account as you know!

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • MON Protocol aims to be a leading developer and publisher of blockchain-native IPs and games. Their vision extends beyond traditional gaming ecosystems, as they seek to bring games and gaming characters onto the blockchain. MON is an ERC-20 fungible token that powers and governs fractionalized IP ecosystems.   30% of the total supply is allocated for community claims, emphasizing community-driven initiatives. While 29% of the total token supply is dedicated to fostering growth and sustainability within both the Pixelmon and MON Protocol communities. All one billion tokens will be fully unlocked within 48 months of the token generation event (TGE), which is anticipated to take place in Q1 2024. This gradual release underscores MON Protocol's commitment to transparency and ecosystem development. Will MON Protocol's unique approach to IP governance, combined with Bitget's strategic listing, positions it as a frontrunner in fostering community engagement and sustainable ecosystem growth?
    • Another reason I prefer DAX to other markets is that I am able to use my own profitable method on it, which I call "Reverse Trades." In it's simplest form it is a good Entry Point, which is used repeatedly for trades, for as many times as the market price returns to this Entry Point.  This is illustrated in the chart below for 22nd May. The best Reverse Trades occur when the market beats the Entry Price and then re-crosses the Entry Price. If this is not clear, feel free to write to me and I will explain in greater detail.
    • The gaming industry is one of the industries that has effectively leveraged the efficiency of blockchain technology to drive growth. A fiercely competitive sector, it takes unique innovative Ideas to stand out. When analysing the chances of infant GameFi projects to reach the heights, one project seems to have staked a claim to be soon held in the same breath as the leading projects– Param Labs. Param Labs, an AAA game and blockchain development studio is dedicated to creating top-tier blockchain-integrated games with player-owned digital assets, and is developing a modular gaming ecosystem, comprised of games and infrastructure.  Already a trending project thanks to the widespread participation of its airdrop, Param has gone on to strike partnership with Animoca Brands, a frontrunner for advancing digital property rights within gaming and the open metaverse; highlighting its wildfire-esque spread. While the buzzing community anticipate their airdrop reward, the news that it will launch on Bitget on 29th May amongst other exciting listings has spiked the anticipation. If you can relate, how excited are you with the imminent launch and what Param Labs brings to the gaming industry generally?
×
×
  • Create New...
us