Typical bet size

Hi All,

I don't trade but am doing some analysis of SB for an assignment I'm working on. Hopefully this isn't a 'how long's a piece of string question' but say considering the FTSE 100, does anyone have a feel for what what the average bet size and spread size is (e.g. I've been told £10 a point on a 2 point spread) which seems high & narrow to me. Is there a rough guide I can apply to forecast quoted spreads?

hope someone can help.

Have a look at the various spreadbetters home pages... you will get quotes for daily FTSE there

As for the bet sizes.. each spreadbetter has min bet for particular index.

boskis said:

Hi All,

I don't trade but am doing some analysis of SB for an assignment I'm working on. Hopefully this isn't a 'how long's a piece of string question' but say considering the FTSE 100, does anyone have a feel for what what the average bet size and spread size is (e.g. I've been told £10 a point on a 2 point spread) which seems high & narrow to me. Is there a rough guide I can apply to forecast quoted spreads?

hope someone can help.

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Are you refering to cash bets or futures bets. Also, for futures bets the spread is wider out of hours. The best way is as suggested already - trawl through the websites, though I'd suggest it's around the following;

Daily bets between 2 - 4 pts
Futures bets between 4 - 8 pts

I think if you try D4F and IG index, you'll span the range of spreads.

regarding bet size, I bet anywhere between £1 and £10 per pt, though as £10 per point is equivalent to £50,000 worth of "index", I doubt this is the average bet.

UTB

the blades said:

Are you refering to cash bets or futures bets. Also, for futures bets the spread is wider out of hours. The best way is as suggested already - trawl through the websites, though I'd suggest it's around the following;

Daily bets between 2 - 4 pts
Futures bets between 4 - 8 pts

I think if you try D4F and IG index, you'll span the range of spreads.

regarding bet size, I bet anywhere between £1 and £10 per pt, though as £10 per point is equivalent to £50,000 worth of "index", I doubt this is the average bet.

UTB

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Nearly there, apologies for sounding ignorant but how does £10 a point equate to £50,000 of index?

boskis said:

Nearly there, apologies for sounding ignorant but how does £10 a point equate to £50,000 of index?

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It's just a way to calculate the value of your holdings - index = 5,000 (ish) X £10 - £50K. This can get more complicated as often only 10% margin is paid and so many would calculate gains against a £5,000 holding (the leverage effect).

If you buy stock at say £10 per pt, it's the same is buying 1,000 shares - every penny movement in the value gives you the same gain or loss as that holding.

In reality, most traders would have a stop somewhere near to the entry pt - say 50 pts away, so ther real "risk" is £500.

Hope this helps but it probably confuses

UTB

the blades said:

It's just a way to calculate the value of your holdings - index = 5,000 (ish) X £10 - £50K. This can get more complicated as often only 10% margin is paid and so many would calculate gains against a £5,000 holding (the leverage effect).

If you buy stock at say £10 per pt, it's the same is buying 1,000 shares - every penny movement in the value gives you the same gain or loss as that holding.

In reality, most traders would have a stop somewhere near to the entry pt - say 50 pts away, so ther real "risk" is £500.

Hope this helps but it probably confuses

UTB

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No it definitely helps and thanks

GammaJammer said:

Is this something for the Reading Uni Finance course or something?

GJ

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Nope! Statistics

When placing a trade I look at the spread, margin required, current price, potential profit/loss and am prepared to use/loose 5% of my account size therefore the only fixed numbers are the spreads and margins. It might be better asking what %age people use as most bet sizes will very from 50p/p to £1000/p depending on the cash available based on the above.

boskis said:

does anyone have a feel for what what the average bet size and spread size is

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I'd suggest to you that the best person here to answer this question is Simon Denham, who is a director of Capital Spreads and who (I think) has worked at other spreadbetting firms before that. He's generally willing to answer almost anything, although possibly in this case a "private message" approach might work better than posting your question on the board. If you look for the thread here called "Capital Spreads", you'll find him that way. His log-in name here is "CapitalSpreads" (all one word, I think). Client confidentiality apart, I would guess that if you explain to him exactly why you're asking, he might be willing at least to drop one or two heavy inferences in replying to you. But I'm only guessing that and you should ask him first! (I'm also guessing, busy chap that he is, that the "Capital Spreads" thread will probably be the only one here that he has time to read and reply to, so if you don't specifically ask him, there's not much chance of his seeing your question.) Hope this suggestion proves useful and apologies to you (and to Simon!) if for some reason it doesn't.