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Guaranteed Stop Premium

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Message added by JamesIG

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Hello All, 

I will be on a limited risk account (seems like a sensible place to start for a n00b like myself).

I understand that you pay a premium for guaranteed stops and that's fine by me.

Usually this is expressed in a premium per point (which I understand) however sometimes it's expressed as a percentage eg 0.3%

What I don't know is what this is a percentage of; is it of the total size of the trade or the money borrowed??

Eg Long something at £10 per point with a guaranteed stop at 10 points gives £100 risk is the stop then 0.3% * £100 = 30p cause that seems kind of small given I might pay 3pts for a stop on something else (£30).

Or is it 0.3% of the total size of the money borrowed? Eg Long something at £10 per point which has 1000 base points gives £10,000 borrowed and thus £30 fee for the stop?

Second example seems more likely but any wisdom will be kindly received.

Cheers Angri

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Hi @Angribob, when the premium is in:

- points - of the bet size (eg. 3pts premium is 3  X £10 per point = £30)

- percentage - of the bet size X price (eg. 0.3% premium is 0.3% X £ 10 per point X £ 1000 price = £30)

Also please note that the premium is paid only if the stop is triggered

I hope this helps. 

 

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