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1. What is ‘the stake’? And what does it mean for me?
In spread betting, the stake is the amount of money you are willing to bet per point of movement in an underlying asset.
For example, if the stake placed was £1 per point, then for every 1 point movement of the underlying market, your account valuation would either increase or decrease by £1 (depending on whether the market is moving in your favour or not).
Your stake also determines how much collateral you have to put up from your account.
The table below compares the results of spread betting on the UK100 with a stake of 1p per point ( a Mini Spread Bet), compared to the standard minimum stake of £1 per point.
Market | Direction | Stake | Opening Trade Price | Closing Trade Price | Spread | Approx Profit/Loss | Approx Margin |
UK100 | B | £1.00 | 5581.75 | 5585.13 | 0.6 | | |
MINI UK100 | B | £0.10 | 5581.75 | 5585.13 | 1.0 | | |
Small stake sizes in spread betting allow new traders to build up confidence, better manage their trading risk and learn to formulate their strategies. They also reduce the margin you need to post, helping your capital go further.
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2. Do I need a new account to trade Mini Spread Bets?
No, you don’t. Mini Spread Bets will be available to all standard Spread Bet accounts.
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3. Are the spreads the same as for normal markets?
No, Mini Spread Bets will have their own spreads, which can be found in the asset specific pages and the market information pages.
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4. Is the spread fixed?
Yes
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5. Are any other financial instruments available for Mini Spread Bets?
No. Only the ones specified are available at present.
Please contact your relationship manager or customer service for any other inquiries.
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6. Are there any plans to add more instruments?
We will be adding new instruments to Mini Spread Bets over time.
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7. Will my short Mini Spread Bets index trades still be free of overnight financing?
Yes
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8. How much profit will I make if a Mini Spread Bet moves 100 points in my favour with a stake of 1p per point?
You will make a profit of £1 excluding the dealing spread.
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9. How much margin is required compared to a stake of £1 per point on the standard market?
The Mini Spread Bets margin could be 10%, or 1% of the Standard Market size, depending on the instrument you choose to trade and the size of your stake – 10p or 1p.
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10. How long can I hold on to the trade?
Mini Spread Bets are all cash, thus are rolled daily and have no expiry and can be held until closed or stopped-out.
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11. Will I be able to execute a spread-free trade on a Mini Spread Bet?
No, Mini Spread Bets are not available to spread free account holders.
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12. How is it priced?
Instead of being priced on a £1 per point movement for the standard market, Mini Spread Bets will be priced on a 10p, or 1p per point movement of the underlying market – depending on the instrument you are trading.
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13. Will I still receive dividends on the Mini Spread Bet indices?
Yes, similar to the standard market.
Financing, Rollovers and Corporate actions are applied as normal.
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14. Can I open a position on the normal market and a Mini Spread Bet at the same time?
Yes
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15. Do liquidation levels change on Mini Spread Bets?
No, you will still be Stopped-out when your account valuation reaches 50% of the margin required (under normal market conditions).
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16. What time are Mini Spread Bets available?
Trading hours are as the same for Mini Spread Bets as for the standard markets.