For every point the underlying market moves you make or lose the equivalent of your bet size, which you specify when you place your bet.
This is normally measured in GBP by default, though many providers allow you to change the currency.
Let’s say you want to bet on EUR/USD, in the expectation that the value of the euro will go up compared to the dollar. If you select the EUR/USD market on your spread betting platform, you might see something like this:
In this instance you decide to bet £5 per point, which is what you enter into your deal ticket. This means you’ll make £5 for every point the market moves in your favour. For every point it moves against you, you’ll lose £5.
The importance of volatility
Keep in mind that staking £5 per point could mean very different things when betting on different markets. The UK’s FTSE 100, for example, will rarely move 300 points in a day and often moves less than 100 points. Italy’s main stock index, the FTSE MIB, however, regularly experiences 600 point swings in one day.
Therefore, it’s vital to make sure you research how volatile your chosen market is before choosing your bet size.
Other points to consider
- Initial deposit – Your bet size will also affect your initial deposit or margin; the bigger your bet size, the more margin you’ll need to pay.
- Minimum bet size – Every market also comes with a minimum size, which will vary from market to market and from provider to provider. This depends on a combination of factors: the value of the market, how frequently it’s traded, and how volatile it is.
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