Spread Betting / Money Management

hagadol

Active member
140 0
Spread Betting / Money Managment

What are the various methods of managing your risk in Spread Betting ?

If I am trading through a traditional stock broker I might have a pot of $100K and decide never to use more than 2% per trade. How can I judge my risk with the Spread Betting in this way ?
 

damianoakley

Established member
542 57
Here goes.

Let's say you have £5,000 capital and want to risk 2% max. per trade.

You want to go long on a stock at 250p with a stop at 230p.

2% risk = £100

£100 divided by your stop of 20p = £5

Therefore you would buy the stock at £5 per point with the Spreadbet company. Providing you exit promptly at 230p, you will lose no more than your 2% risk of £100.

Hope this helps.
 
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock