3. Open a position
Once you’ve identified a market you think is going to move up or down, you're ready to place a deal. For instance if you think the Vodafone share price is about to go up, you can buy Vodafone; if you think it'll fall, you can sell.
When opening a position, there are few things to bear in mind:
Buy and sell prices
The prices for buying and selling Vodafone will be different, and the difference in prices is called the spread. The spread is how you pay your spread betting provider to open the position on your behalf, instead of paying commission.
The price to buy will always be higher than the current underlying value of the asset you are dealing, and the price to sell will always be lower.
Each of our markets has its own minimum bet size per point.
Our minimum for Vodafone, for instance, is £1 per point. A bet of this size will see you make (or lose) £1 for every point of movement in the Vodafone share price. Here, one point equates to one penny of movement, so if the price of Vodafone increases by £1, you stand to make £100.
You can choose between a daily funded bet (DFB) that remains open in effect indefinitely, and a longer term bet that will expire on a specified date.*
For more information on bet sizes and types of bet, see the components of a spread bet.
To help restrict your potential losses, you can use a stop. Stops close a position once the market reaches a specified level (unless slippage occurs). You can set that level when you open the bet, or attach a standard stop to an open position.
Guaranteed stops are also available – guaranteed stops are not susceptible to slippage, but must be placed before you open your position and will incur a fee if triggered.
To find out more about stops, see managing risk.