Stocks & Shares
Individual shares remain a popular focus of financial spread betting. Rather than going through the traditional process of purchasing the share itself, our leveraged spread bet product allows you to gain the same exposure to the share with as little as 5% of the capital required by a stockbroker. There are also tax efficiencies to be had by using ETX Capital as in the UK there is no capital gains taxes payable on successful trades. Please bear in mind that tax law may change or differ depending on your personal circumstances or if you do not pay tax in the UK.
ETX Capital gives you access to 1000s of stocks and shares from all the popular stock exchanges including over 500 UK shares, 250 US shares and 100s more from Europe and the rest of the World.
Trading Example
You may feel that (our fictitious company) ABC's interim results, which will be announced over the next few days, will be stronger than expected and decide therefore that you will bet on a rise in their share price (a bet on a rise in share prices is known as buying or 'going long').
The ETX Capital spread price in ABC is 371p - 372p. You decide to open a buy (up) bet on our daily rolling cash bet of £10 per point of ABC at the higher price of 372. This equates to owning 1000 shares of ABC actual shares at a price of 372p. The value of the shares is calculated by multiplying the stake (in this case £10) by the price you have paid, so in this example the value of the bet would be £3,720. The result is also known as the total trade consideration.
As Financial Spread Betting is traded on margin, a small percentage of the total trade consideration is required to secure the trade, in this example the margin requirement is 5%, and therefore you need only £186 in your account with us to open the bet (£3,720 x 5%). Please remember that if the markets move adversely, ETX Capital may require further funds from you to cover your open losses. We therefore recommend that you deposit slightly more than this sum just in case.
Over the next 3 days the price of ABC trades at around the same price as when you placed your Spread Bet trade, so you keep your position open, allowing the trade to rollover each of the 3 days.
On day 4 as you predicted, ABC announce better than expected results leading the ETX Capital price to rise to 381 - 382. With our selling price now showing 381 against your initial purchase of ABC at 372, the position equates to a rise of 9 pence. You therefore close the bet (also called squaring or flattening it) by selling an amount equal to your initial opening bet, so in this case £10.
Profit and loss on this trade would be calculated as follows:
| 372 |
(Buy price) |
| - 381 |
(Sell price) |
| = 9p |
|
| X £10 |
(Bet per penny movement) |
| =£90 |
(Profit before deduction of rollover costs) |
The rollover costs for this trade are calculated by taking the total trade consideration, in this case £3720, and multiplying it by the overnight financing rate (ETX currently charge 2.50% on top of the overnight inter ban rate, also known as LIBOR). This figure is then divided by 365 (days in the year) and then multiplied by the number of days you hold you keep your bet open for. Therefore if LIBOR was 1% the rollover costs for the bet above would be £3720 x 3.5% / 365 x 3 = £1.07p. Your total profit on the bet in the example would have been £90 - £1.07 or £88.93.
Obviously had the market price fallen and you decided to sell you would have incurred a loss.
Rolling daily bets available from world stock exchanges.
- Top 20 Denmark
- Top 20 Finland
- Top 40 France
- Top 30 Germany
- Top 40 Italy
- Top 25 Netherlands
- Top 20 Norway
- Top 40 South Africa
- Top 35 Spain
- Top 30 Sweden
- Top 30 Swiss
- Top 550 UK shares
- Top 250 US Shares
- Exchange Traded Funds
Member of the London Stock Exchange. Authorised and Regulated by the Financial Services Authority, FSA registration number 124721.
DISCLAIMER: The information on the Site is not directed at residents of the United States or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. It is the responsibility of visitors to this Site to ascertain the terms of and comply with any local law or regulation to which they are subject. Whilst ETX Capital has made every effort to ensure the accuracy of the information on this Site, the information given on the Site is subject to change, often without notice. It is for guidance only and no liability is accepted by ETX Capital for its accuracy or otherwise.