Shares Examples

DFB

Our Daily Funded Bets on shares are offered at extremely narrow spreads, giving ideal flexibility and control over the short-term.

Opening the Position

You have been following the share price of Glencore International, a company that was newly listed on the London Stock Exchange in May 2011. It is the morning of 16 June 2011 and after two days of sharp declines in Glencore's share price, you believe the shares are now good value for money.

The price we are quoting for the Glencore DFB contract is 460.85–461.95, and you think that the shares have been oversold, so you decide to 'buy' £25 per point at 461.95, the offer price.

Your bet is the equivalent of 2500 shares, because if you did own 2500 shares, as with conventional share dealing, each penny movement in the price would be worth £25 to you. To see an example of how bet deposits are calculated, visit the Deposit Rates section of our FAQs.

Closing the Position

During the day, market sentiment turns in favour of Glencore. Just before the close of trading, our price stands at 474.50–475.65 and you decide to take your profit by 'selling' at 474.50, the bid price. The profit on the position is calculated as follows:

Profit: 12.55 x £25 = £313.75

Remember, spread betting is a leveraged product which can result in losses in excess of your initial deposit. Had the market moved in the opposite direction, you would have lost £25 for every point it fell below 461.95.

If you had felt that Glencore's stock would continue to rise on the following day, you could have kept your bet open through the close of trading, and you would have been charged the daily funding cost for holding the bet overnight.

*This depends on individual circumstances and may be subject to change in the future. Tax law may differ in a jurisdiction other than the UK.