Spread Betting Calculators

How are spread bets calculated in spread betting?

Spreads are calculated by the spread bet provider against the underlying asset. This will often reflect the real prices although the buy price will be higher and the sell price will be lower – this is because spread betting is ‘commission-free’ but there is a cost built into the spread.

To calculate a spread bet on UK stocks, it is important to remember that 1p is 1 share.

Therefore, if you were to buy 10 pounds per point (PP) you are buying 1,000 shares (10 * 100 = 1,000).

You would then need to multiply your buy price by 1,000 (or the sell price by 1,000 if you’re short selling) and this would give you your exposure.

Spread bet size example

Here is an example of a spread bet.

Below is a ticket from IG Markets.

It is a spread bet dealing ticket for UK listed stock Barclays (BARC).

I have put in 100 PP (pounds per point) in the stake window, where it is called “Size”.

If I was to press buy, this would mean my exposure would be £18,671.

This is because 100 * 100 = 10,000.

10,000 shares multiplied by the buy price of 186.71 is 1,867,100p, or £18,671.00.

It is crucial that you use proper place value, as one decimal point in a mistake can mean the difference between buying £18,671 worth of stock, or £186,710 worth.

You will be limited by your account size as to the exposure you can take because retail investor accounts are never at risk of negative equity, but it is far better to take the intended position size rather than see it increase by a factor of 10.

However, professional traders can lose their entire account and more.

This is why spread betting has an increased risk of potential losses.

Using this calculator will help – but always remember 1p = 1 share.

How to use the spread betting calculator

To use the spread bet calculator you simply input your intended exposure and the share price and this will calculate your bet size.

With the PP calculator you input your intended pound per point and the share price, and this will give you your total exposure.  

You should take note of the given spread in the underlying asset on the provider’s trading platform because a trading instrument such as a spread bet can carry a wider spread then the real asset it is mirroring.

This calculator form uses pounds and pence (GBP) although other currencies such as USD will work in the same way.

Understanding your spread bet size

Your spread bet size will determine the total exposure of the underlying market that you’re trading.

For example, if you do £100 per point, then you would need to multiply this by the asset’s price in order to get your total exposure.

If you input your total exposure in the calculator this will give you your bet size.

I have my spread bet size, now what?

Once you have your bet size for your intended exposure, I strongly suggest you use risk management and know where you’re getting out of the trade.

Spread bets are leveraged complex instruments that carry a level of high risk.

How to calculate your profit in spread betting

Calculating your profit in spread betting simple.

You take your opening exposure and minus your closing exposure. If the number is positive then you made a profit, and if the number is negative then you made a loss.

Opening exposure – closing exposure = net P&L

There are no commissions in spread betting unlike with how CFDs work as the cost is built into the spread by the spread bet provider, so the calculating for working out your profit or loss doesn’t need to include commission charges.

Money management strategy

Spread bet financial instruments and financial markets carry a high level of risk.

It is necessary to calculator your full exposure prior to opening the position and use the correct stop-loss amount as required in your trading strategy.

Everyone has different individual circumstances but only profitable traders should use spread betting in their trading arsenal. Getting into a good routine and managing emotion are two factors of success in spread betting

If you’re not profitable with the capital you have – why would you leverage this? Leveraging losses doesn’t make any sense.

Using maximum leverage can boost your potential payout but also increase potential losses. It is wise to start with small stakes and increase this as you start winning.

People can and do make a lot of money trading spread bets however others lose their shirt and more.

Spread betting is exempt from capital gains tax and stamp duty, and on liquid instruments there can be tight spreads.

For more information on spread betting, you can read my walkthrough guide here.

Disclosure: This spread bet calculator is used at your own risk. Whilst every care has been taken to ensure the spread bet calculator’s accuracy it cannot be guaranteed.

It is not intended for forex (fx), currency pairs, and should only be used in a jurisdiction where spread betting is legal. Regulation and local law can vary, and the account currency used in this spread bet calculator is British Pound Sterling.