Spread betting examples

The quickest way to understand spread betting is to work through the numbers on realistic trades — wins and losses alike. Here are three fully worked examples with every calculation shown.

How the sums work

Every spread bet, win or lose, uses the same three calculations:

• Exposure = price × stake per point
• Margin = exposure × margin rate (FCA minimums: 5% for major indices, 20% for individual shares)
• Profit or loss = points moved × stake per point

If you have not yet placed a trade, our guide on how to spread bet explains the deal ticket itself. Below, we simply run the numbers — honestly, in both directions.

Example 1: a winning long on the FTSE 100

Suppose the FTSE 100 — the best known of the indices — trades around 10,650 and you buy at £2 per point. Your exposure is 10,650 × £2 = £21,300. At the 5% margin rate the deposit required is £21,300 × 0.05 = £1,065. The index rises 100 points to 10,750 and you close: 100 × £2 = £200 profit. In practice the spread trims this slightly — with a two-point spread you buy a point above and sell a point below the underlying, so you would bank closer to 98 points, or £196. That profit is currently free of capital gains tax (here is why). Notice the leverage: a market move of under 1% returned almost 19% on the margin posted. It cuts both ways.

Example 2: a losing short on the same index

Now the other direction. Expecting a fall, you sell at 10,650, again at £2 per point. The exposure is identical — £21,300 — and so is the £1,065 margin. Instead, the index rises 150 points to 10,800. Your loss is 150 × £2 = £300: about 28% of the margin you posted, from a move of roughly 1.4%. Nothing caps that loss except a stop or your own decision to close; if you freeze, it keeps growing. Negative balance protection means a UK retail account cannot go below zero, but it does nothing to protect the money inside the account.

Example 3: a share trade where the stop is hit

Individual shares carry a 20% FCA minimum margin. Suppose a share trades at 500p and you buy at £4 per point, one point being one penny. Exposure: 500 × £4 = £2,000. Margin: £2,000 × 0.20 = £400. The chart shows support at 475p, so you place your stop there, fixing your planned risk at 25 points × £4 = £100. The support breaks, the stop triggers, and you take the £100 loss — the plan worked even though the trade did not. One caution: a standard stop is not guaranteed. If bad news lands overnight and the share opens at 460p, the stop fills there instead: 40 × £4 = £160. Our guide to stop-losses explains gapping, and the guaranteed stops that fill at your level for an extra charge.

The lesson: the arithmetic is symmetrical

Read the three examples again and notice that every result came from the same formula: points moved times stake per point. The market applies no different maths to winners and losers, and no forecast changes it. The only part you fully control is the risk management — where the stop sits, how small the stake is, and how much of your account any one trade can take. Before going live, run your own figures through the margin calculator.

FCA-required disclosures show that most retail accounts lose money — typically 60–90%. Assume the arithmetic above will run against you at least as often as for you, and size every stake accordingly.