Buying and selling a price

There is no stake box on a spread market. There is a side, and a number of pounds or dollars for each point of movement. Everything a reader needs to understand about the product follows from those two choices and the two prices they are made against.

Open the partner account Start with how the two-sided trade works

Direct answerYou choose a direction and an amount per point. Buying means taking the higher quoted price, so a profit needs the index to settle above it; selling means accepting the lower price, so a profit needs the index to settle below it. The amount per point is a multiplier, not a cap on loss.

Step by step, without a stake

A market is quoted two ways You are shown a sell price and a buy price, for example 26–29. The distance between them is the spread, and it is the same whichever side you take: you cross it on the way in.
You pick the side Buy if you think the compiled number will finish above 29; sell if you think it will finish below 26. Nobody asks you for an amount of money to win.
You pick money per point £1 per point, £5 per point, £20 per point. This is a multiplier on every point of movement in either direction, and it is also the figure the firm's margin requirement is calculated from.
The position is opened and marked From that moment the pair is re-quoted as events happen, and the account shows an unrealised profit or loss computed from the price it would take to close, not from the middle of the pair.
You close, or it settles Closing means trading the opposite side of the current pair. Settling means the index is compiled once from the official result and the position is valued at that final number — see settlement and the make-up.

Where the break-even sits

The most useful number on this whole desk is the distance the market has to move before a position is level. It is not zero. A buyer pays the higher price in a pair whose middle is lower, so the position starts behind by half the spread; and to realise anything, the buyer has to sell back at the lower price, which means the whole spread has to be earned back first.

Quoted 26–29 · £2 per point · you buy at 29
the fair middle of the pair is (26 + 29) ÷ 2 = 27.5 points
opening the position costs 29 − 27.5 = 1.5 points = 1.5 × £2 = £3
to close level you would sell at 29, so the index must make up at 29
to close at once: buy 29, sell 26 → (26 − 29) × £2 = −£6
a nineteen-point rise, from 29 to 48: 19 × £2 = +£38

Two consequences follow. First, a view has to be right by more than the spread before it pays: being directionally correct is not the same as being profitable. Second, the size of the spread relative to the market's own movement is what makes one market more expensive to hold than another — a three-point spread on an index that moves twenty points is a different proposition from a six-point spread on an index that moves four, which is covered on the cost page.

Opening and closing is the same mechanism twice

A spread position is closed by trading the opposite side of the pair, so a round trip crosses the spread once on each side and pays it once in total. That produces the small oddity that confuses new readers: the profit shown when a position is marked is not the profit that would land in the account if it were closed at that moment, because closing means giving up the other half of the spread.

One buy at 29, £2 per point — what the gross movement and the realisable amount look like
Index / quote	Gross movement from the entry	What closing at that pair would realise
Quote 26–29, just opened	0 points	−£6 (the spread, paid immediately)
Quote 29–32	+3 points from the middle	+£0 (level once the spread is paid)
Quote 33–36	+7 points from the middle	+£8 (four points releasable)
Quote 19–22	−7 points from the middle	−£20 (ten points against)

The right-hand column is the number that matters to the account, and it is always the more pessimistic of the two. How that column is marked and reported is the subject of the running profit and loss page.

The link below is the disclosed sponsored link described at the top of this page. It is a commercial link, not a market to take a side on, and nothing here suggests any firm, any market or any direction.

Open the partner account

Scope

The dangerous part of that mechanism is invisible if you only read about the winning case: the amount per point is a multiplier in both directions, and a fixed-odds instinct — “I can only lose what I staked” — does not carry across. What happens when the index moves far against a position is set out on the page about losing more than the stake, and the margin that decides whether the position survives long enough to settle is on the margin page.