Spread question

China Diapers

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Hi,

With spreadbetting do you pay the spread twice, i.e. on opening and then again when closing, or is it only when opening longs and closing shorts?

Thanks
 
No you do not pay the spread twice. If the spread is 2 pips then you will only pay 2 pips in total. Imagine if the spread is 1.3300 and 1.3302, you would buy at 1.3302 and if you immediately sold you would sell at 1.3300. Thats 2 pips. In reality the mid price is 1.3301 so its a 1 pip on either side.
 
Another dumb one. If I select a for example the june contract for a particular instrument and still have an open position at expiry, does the position get closed automatically or is there an option to roll over? What are the costs involved?
 
It depends on your broker. Most give the option to set a default, either to close on expiry or roll-over. If you roll-over they usually discount the spread on the next contract. If you go to the IG Index website you can download its dealing handbook which answers both questions you've asked so far, and probably the next one too ;)
 
If you go to the IG Index website you can download its dealing handbook which answers both questions you've asked so far, and probably the next one too ;)

Ah yes, but I wouldn't get the witty responses from IG Index like I do here now would I?
 
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