You open a litecoin spread betting position when it’s trading at $300, and our price is 305 to buy and 295 to sell. You’re anticipating that litecoin’s price is headed down, so you sell £10 per point at 295. This means that you’ll earn £10 for every point that litecoin goes down in price, and lose £10 for every point it moves up.
Litecoin’s price does indeed move down, to $250. Our price is now 255 to buy and 245 to sell. You buy £10 per point at 255 to close your position.
250 – 295 = -40, so your position has moved 40 points. Your gross profit is 10 x 40, or £400.
If you’d gone long instead of short, you would have lost £600 (50 points of movement plus ten points from the spread).3