Stock Indices Examples
FTSE® DFB
Our stock index market DFBs allow you to bet on the intraday movements of a particular index. FTSE® DFBs are one of our most popular markets, with tight in-hours spreads of just 1 point.
In this example, you decide you want to bet on the short-term direction of the FTSE® 100. For details of how the bet deposit is calculated, visit the Deposit Rates section of our FAQs.
One morning in mid-July, our FTSE® 100 DFB price is quoted at 5925 – 5926.
This means you can 'sell' at 5925 or 'buy' at 5926 ('buy' transactions are made at the higher end of the spread and 'sell' at the lower end).
Sell
You think the market is going to fall, so you choose to 'sell'. You decide to risk £10 per point.
You 'sell' £10 per point at 5925
Against your expectations, the market rises. You opt to cut your losses and close your bet in case the market moves further against you.
At midday the price we quote is
5952-5953
In order to close a 'sell' bet you need to 'buy' at the top end of the spread
You 'buy' £10 per point at 5953
Your loss is calculated as follows:
| Opening price | 5925 |
| Closing price | 5953 |
| Difference | 28 |
Loss: 28 x £10 = £280
Buy
You think the market is going to rise, so you choose to 'buy'. You decide to risk £10 per point.
You 'buy' £10 per point at 5926
As you predicted, the market rises in the afternoon and you choose to take your profit
At midday the price we quote is
5952-5953
To close a 'buy' bet you simply 'sell' at the bottom end of the spread
You 'sell' £10 per point at 5952
Your profit is calculated as follows:
| Opening price | 5926 |
| Closing price | 5952 |
| Difference | 26 |
Win: 26 x £10 = £260
Buying the euro
A controlled risk bet, using a Guaranteed Stop, is the ideal way to put an absolute cap on your risk.
The example below shows you how this device can help you guard against losses. For details of how the bet deposit is calculated, visit the Deposit Rates section of our FAQs.
It is July and you believe that Wall Street is set to fall over the next few months. You check our live price for Daily Wall Street future (Sep) and we are quoting 12,520-12,524.
You make the decision to 'sell' £15 per point, but want to limit your risk. The opening price for a controlled risk 'sell' is our bid price minus our controlled risk premium of 3:
12,520 – 3 = 12,517
You do not want to lose any more than £900 on this bet, so at £15 per point you can only afford the market to move 60 points against you – in this case up to 12,577 from your 'sell' price of 12,517.
You eventually decide to put your Guaranteed Stop at 12,575, risking a move of 58 points or £870 (58 x £15) against you. This ensures your bet will be automatically closed if the market rises to this level.
A few days after opening the bet, Wall Street does fall. Do you want to take your profit?
Yes
You check our current Daily Wall Street future (Sep) price. We quote
12,319-12,323
To close this 'sell' bet you 'buy' £15 per point at the offer price of 12,323
Your profit is calculated as follows:
| Opening price | 12,517 |
| Closing price | 12,323 |
| Difference | 194 |
Win: 194 x £15 = £2910
No
You decide to leave your bet open, but your decision seems to be the wrong one as Wall Street makes rapid gains and trades up strongly to 12,650.
With no risk control in place, you would be running a significant loss. However, your Guaranteed Stop kicked in and your position was automatically closed when Wall Street reached 12,575.
Your loss is calculated as follows:
| Opening price | 12,517 |
| Closing price | 12575 |
| Difference | 58 |
Lose 58 x £15 = £870
Sector bets
Our sector bets give you exposure to those FTSE® 350 companies focusing on a single industry, letting you take advantage of strength or weakness in a particular sector.
It is June. You take a view that the recent rally in raw material prices has further to go and will mean a rise in the value of mining companies. As such, you decide to take a long quarterly position on the Mining sector, which includes FTSE® 350 mining and natural resource companies.
Our September Mining price, as at mid-June, is quoted at 23,950-24,110.
This means you can 'sell' at 23,950 or 'buy' at 24,110. You are looking to go long, so buy to open a bet of 50p/point at 24,110.
Your prediction turns out to be correct, and over the next month there is a strong increase in the value of mining companies. In July the sector has risen to 26,820-26,890. You see this as a likely high for the sector, and sell to close your bet at 26,820.
Your profit is calculated as follows:
Profit on deal
| Opening price | 24,110 |
| Closing price | 26,820 |
| Difference | 2710 |
Profit: 2710 x £0.5 = £1355
Alternatively, if you had expected the price to rise further you could have kept your bet open. In this scenario, the Mining sector shows a steep decline in early August on news that Chinese manufacturing levels have dropped sharply. You manage to close your position when our quote is 22,680-22,840, 'selling' 50p/point at 22,680.
Your loss would be calculated as follows:
Loss on deal
| Opening price | 24110 |
| Closing price | 22680 |
| Difference | 1430 |
Loss: 1430 x £0.5 = £715