AB Foods Spread Betting Guide

AB Foods Spread Betting Guide

AB Foods Spread Betting Guide

arrow_forwardLive AB Foods Chart
arrow_forwardLive AB Foods Prices
arrow_forwardWhere to Spread Bet on AB Foods
arrow_forwardHow to Spread Bet on AB Foods


Live AB Foods CFD Chart and Prices



Where Can I Spread Bet on AB Foods?

Most of the spread betting brokers will offer prices and charts on shares including AB Foods e.g.:

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How to Spread Bet on AB Foods

For example, let’s imagine that you are interested in taking a position on Associated British Foods, so you look on a spread trading site, like LCG, and they are offering the latest quote at:

AB Foods Rolling Daily: 1174.4p – 1176.6p

Here’s what you need to know about how it works

The Spread Betting Market: Associated British Foods Rolling Daily
The Spread: 1174.4p – 1176.6p
How the Spread Works: Now you can speculate on the AB Foods Rolling Daily market moving:

  arrow_upward  Higher than 1176.6p, or
  arrow_downward  Lower than 1174.4p

This is a ‘Rolling Daily’ trade which means that there is no final closing date for this spread bet. If you don’t close your trade and the trading session ends then your position will roll over into the next trading day.

Note: if a trade rolls over then you will either receive or pay interest for overnight financing depending on the direction of your trade.

For more information also see how a daily spread bet works.
Units (Points) Traded: Spread betting trades on the Associated British Foods market are made in £x per penny.

Where a penny is 1p of the UK equity’s price movement.

E.g. if Associated British Foods moves by 30p then you would lose or win 30 times your stake.
Stake (Trade Size): You choose how much you want to stake per penny, e.g. £1 per penny, £4 per penny, £20 per penny etc.
Simplified Example: For example, if your stake is £3 per penny and AB Foods moves 29p, you would win / lose £3 per penny x 29p = £87.


Worked Spread Betting Example | Taking a Long Position on Associated British Foods

Financial spread trading on the share to go higher

You Now Work Out Whether to Go Long or Short: Associated British Foods going:

  arrow_upward  Higher than 1176.6p? or
  arrow_downward  Lower than 1174.4p?

Let’s Assume You Decide to Buy:   arrow_upward  Higher than 1176.6p
You Choose How Much to Risk, Let’s Say You Select: £2 per penny
What Happens Now?
  • You make a gain of £2 for each penny ABF rises above 1176.6p
  • Your spread bet loses £2 for every penny ABF falls lower than 1176.6p
If You Are Spread Betting on a Market to Rise Your Trading Profits or Losses = (Closing Level – Initial Level) x stake per penny
 
Situation 1 ABF goes higher and the market moves to 1217.8p – 1220.0p.
Lock in a Profit? You could opt to let your bet run or close it, i.e. close your spread bet to lock in a profit. For this example, you choose to close your position and sell the market at 1217.8p.
Your Trading Profits or Losses = (Closing Level – Initial Level) x stake per penny
(1217.8p – 1176.6p) x £2 per penny
41.2p x £2 per penny
Your Trading Profits or Losses = £82.40 profit
 
Situation 2 ABF pushes lower and the financial spread betting market is adjusted to 1129.5p – 1131.7p.
Limit Your Loss? You may choose to let your bet run or close it, i.e. close your position and restrict your losses. In this example you decide to close your trade by selling at 1129.5p.
Your Trading Profits or Losses = (Closing Level – Initial Level) x stake per penny
(1129.5p – 1176.6p) x £2 per penny
-47.1p x £2 per penny
Your Trading Profits or Losses = -£94.20 loss


Spread Betting Example | Taking a Bearish View of Associated British Foods

Financial spread betting on the share to go down in value

You Now Choose to Buy or Sell: Associated British Foods to go:

  arrow_upward  Higher than 1176.6p? or
  arrow_downward  Lower than 1174.4p?

Let’s Say You Want to Go Short:   arrow_downward  Lower than 1174.4p
You Select How Much to Risk, Let’s Say You Opt For: £3 per penny
What Next?
  • Your spread bet loses £3 for every penny ABF rises higher than 1174.4p
  • You make a gain of £3 for every penny ABF goes below 1174.4p
When Selling a Market Your Trading Profits or Losses = (Initial Level – Closing Level) x stake per penny
 
Situation 3 AB Foods slips and the spread trading market is moved to 1137.3p – 1139.5p.
Time to Lock in Your Profit? At this point, you can decide to leave your position open or close it and lock in a profit. In this case you choose to settle your position by buying the market at 1139.5p.
Your Trading Profits or Losses = (Initial Level – Closing Level) x stake per penny
(1174.4p – 1139.5p) x £3 per penny
34.9p x £3 per penny
Your Trading Profits or Losses = £104.70 profit
 
Situation 4 AB Foods pushes higher and the spread betting market is revised and set at 1212.1p – 1214.3p.
Restrict the Loss?At this point, you could opt to keep your spread bet open or close it, i.e. close your spread bet and limit your loss. In this example you opt to settle your bet by buying at 1214.3p.
Your Trading Profits or Losses = (Initial Level – Closing Level) x stake per penny
(1174.4p – 1214.3p) x £3 per penny
-39.9p x £3 per penny
Your Trading Profits or Losses = -£119.70 loss


Associated British Foods Notes:

  • Financial spread betting prices obtained from LCG as of 6 February 2012
  • Most spread betting firms will also let you financial spread bet on the food, ingredients and retail group in euros per penny and US dollars per penny

AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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