You can put as much or as little in your account as you want but you need to have enough in there to cover any possible losses.
In the Tesco example where you buy at 348.5 £10 per point. The most you could lose is 348.5 x 10 = £3485 But you don't need £3485 in your account to open the trade.
There will be a margin factor for every instrument you trade. For Tesco this is 10% of your total exposure. Your total exposure is £3485 so you need £348.50 in your account to trade Tesco at £10 per point. You can use a stop loss to reduce your total exposure. For example, if you place a stop loss on your Tesco trade at 328.5, your exposure is reduced because you are only risking a 20 point loss (£200 at £10 per point). The more you reduce your exposure by using stop losses the more trades you can have open simultaneously up until you are using up all of your margin, but that isn't recommended as if your losses become too big you'll recieve a margin call telling you to deposit more capital. If you don't, I think they can close the positions on your behalf.
You kind of have the right idea, you basically work out what you are risking and make sure you have enough in there to cover it. Use stop losses to reduce your risk. As a guide you should only risk about 2% of your capital per trade. For example, if you have £2000 in your spread betting account, you shouldn't risk more than £40 (2% of £2000). If I was using this money management on the Tesco trade, buy at 348.5 I would set a stop loss 4 points away at 344.5. If the price moves 4 points against me I'll be stopped out for a £40 loss. However, its normally easier to work it out the other way around. I.e. Work out where to enter and place a stop loss first. Then divide 2% of your capital (£40 in this case) between the number of points between entry price and stop loss to work out how many £ per point you should trade. For example, you want to go long Tesco at 350, you want to place your stop loss at 340 (because your technical analysis indicates this), therefore you are risking 10 points on the trade. 2% of your £2000 capital is £40. Divide £40 by 10 points. Thats £4 so you would enter your stake as £4 per point.
Yes no shares are bought or sold, its just a bet on price movement. The cost of the spread bet is in the spread correct, also if you hold a trade overnight you'll pay a bit but not much. Depends whether its spot or futures. Anyway, I'm tired of answering questions now. Get a book!
Sam.
