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Financial spread betting is a type of derivative product that allows you to bet on the price movements of the financial markets where the risk per pip can be defined to a specific value.

1. What’s the order volume for spread betting accounts?

The order volume for spread betting is the amount of your stake in British pounds (GBP): for example, a volume of 1 would be a full bet which is worth GBP1 per pip for Forex.

2. What’s the minimum trade size I can place on my spread betting account?

Normally, you can start spread betting from 10 pence per pip, which means the minimum order volume for a spread betting account is 0.1.

3. How do I calculate the margin requirement for a forex spread betting position?

Please follow the calculation below:

Margin requirement = entry price × 10,000 × order volume / leverage

For JPY pairs, margin requirement = entry price × 100 × order volume / leverage

For example, if you decide to place a volume of 0.1 at a leverage of 1:100 for EURGBP at an entry price of 0.81069, then:

Margin requirement = 0.81069 × 10,000 × 0.1/100

Margin requirement = GBP8.11

4. How do I calculate my profit or loss for a spread bet?

Let’s say you placed a sell order in GBPUSD at an opening price of 1.56850, which you closed at 1.55223 for a stake of 12p/pip:

Profit or loss = (opening price – closing price) × 10,000 × stake

Profit or loss = (1.56850 – 1.555223) × 10,000 = 162.7

Stake 12p/pip × 162.7 pips = GBP 19.52 profit

On the other hand, if you placed a buy order in GBPUSD at an opening price of 1.56850, which you closed at 1.55223 for a stake of 12p/pip, the outcome would be different:

Profit or loss = (1.55223 – 1.56850) × 10,000 = -162.7

Stake 12p/pip × 162.7 pips = GBP19.52 loss

5. What are the trading hours for spread betting?

For spread betting on forex, the trading session starts every Sunday at 22:00 UK time (Monday 00:00 EET) and ends every Friday at 22:00 UK time (00:00 EET).

For spread betting on indices and commodities, trading hours vary.

Please check index spread betting product and contract specifications and commodity spread betting product and contract specifications.

6. What are the advantages of spread betting?

The biggest advantage of spread betting is that your profits are tax free* in the UK and Ireland and there are no commission charges.

*Any profits you make from spread betting are completely free of capital gains tax, stamp duty and income tax (for residents of the UK and the Republic of Ireland). UK and Irish tax laws are subject to change and individual circumstances may vary.

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