Excerpt from: Understanding Spread Betting
|
 |
| September 08, 2006 | | An explanation how to take profits in financial spread betting | There is cutting losses in spread betting, and taking profits. Incademy offers an excellent explanation of taking profits when it comes to financial spread betting:
Using the FTSE 100 example again, suppose you placed a £10 buy bet
at 6150 - 6200 on a three month contract (i.e. the bet will expire on
31st March). After two months the spread has risen to 6300 - 6350 but
you think that it may fall back in the last month of the contract. You
decide to take your profits. To do this you place a £10 sell bet at 6300 on a one month contract. Your profit would be: | Bought at: | 6200 | | Sold at: | 6300 | | Difference: | 100 | | Stake: | £10 | | Profit: | £1,000 |
If the index does fall back in the last month, your decision will have been vindicated. If it continues to rise, you would have made more money by letting your first bet run its course. | | |
|
|
