BP Spread Betting Guide

BP Spread Betting Guide

BP Spread Betting Guide

arrow_forwardLive BP Chart
arrow_forwardLive BP Prices
arrow_forwardWhere to Spread Bet on BP
arrow_forwardHow to Spread Bet on BP


Live BP CFD Chart and Prices



Where Can I Spread Bet on BP?

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

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How to Spread Bet on BP

As an example, let’s imagine you are interested in financial spread betting on BP, you look at a financial spread betting website, like Tradefair, and see that they are offering the current spread of:

BP Rolling Daily: 446.5p – 447.1p

Here’s what you need to know.

Spread Trading Market BP Rolling Daily
The Spread Betting Price 446.5p – 447.1p
This Means You can speculate on the BP Rolling Daily market to push:

  arrow_upward  Above 447.1p, or
  arrow_downward  Below 446.5p

This is a ‘Rolling Daily’ market meaning that it does not have a final closing date. If you decide not to close your position and the session ends then your trade will roll over into the next session.

If the trade is rolled over then you will either be credited or debited for overnight financing based upon whether you are speculating on the market to go up or down.

For additional details also see how a rolling spread bet works.
Traded Units Financial spread bets on the BP market are made in £x per penny.

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

E.g. if BP moves 40p then you would lose/win 40 times your stake.
Stake per Unit You decide how much you would like to risk per penny, e.g. £2 per penny, £4 per penny, £15 per penny etc.
Quick Example If, for example, you went with a stake of £4 per penny and BP moves by 31p, you would win / lose £4 per penny x 31p = £124.


Worked Example | Going Long of BP

Financial spread betting on the equity to move up in value

You Now Consider Whether to Go Long or Short BP going:

  arrow_upward  Above 447.1p? or
  arrow_downward  Below 446.5p?

Let’s Say You Decide to Buy   arrow_upward  Above 447.1p
You Select Your Stake, Let’s Assume You Choose £5 per penny
So Now What?
  • You will make a gain of £5 for each penny BP pushes above 447.1p
  • Your trade loses £5 for every penny BP moves lower than 447.1p
If You Buy a Market Your Profits/Losses = (Settlement Price – Opening Price) x stake per penny
 
Trading Scenario 1 BP goes higher and the market is revised and is set at 461.6p – 462.2p.
Take a Profit? You can opt to leave your spread bet open or close it to take your profit. In this instance you opt to close your position by selling at 461.6p.
Your Profits/Losses = (Settlement Price – Opening Price) x stake per penny
(461.6p – 447.1p) x £5 per penny
14.5p x £5 per penny
Your Profits/Losses = £72.50 profit
 
Trading Scenario 2 BP falls and the spread trading market is revised and moved to 430.3p – 430.9p.
Close and Restrict Your Loss? You may choose to let your trade run or close it, i.e. close your spread bet to restrict your loss. For this example, you decide to close your position and sell the market at 430.3p.
Your Profits/Losses = (Settlement Price – Opening Price) x stake per penny
(430.3p – 447.1p) x £5 per penny
-16.8p x £5 per penny
Your Profits/Losses = -£84.00 loss


Worked Spread Betting Example | Taking a Bearish View of BP

Spread trading on the oil firm’s share price to drop

You Now Work Out Whether to Go Long or Short BP moving:

  arrow_upward  Above 447.1p? or
  arrow_downward  Below 446.5p?

Let’s Assume You Go Short   arrow_downward  Below 446.5p
You Decide How Much to Risk, Opting for £10 per penny
Now What Happens?
  • Your trade loses £10 for every penny BP rises higher than 446.5p
  • You will make a gain of £10 for every penny BP goes lower than 446.5p
If You Are Going Short of a Market Your Profits/Losses = (Opening Price – Settlement Price) x stake per penny
 
Trading Scenario 3 BP pushes lower and the spread betting market adjusts and moves to 436.5p – 437.1p.
Lock in Your Profit? At this point, you can decide to keep your trade open or close it in order to take your profit. For this example, you decide to close your bet by buying at 437.1p.
Your Profits/Losses = (Opening Price – Settlement Price) x stake per penny
(446.5p – 437.1p) x £10 per penny
9.4p x £10 per penny
Your Profits/Losses = £94.00 profit
 
Trading Scenario 4 BP moves higher and the financial spread betting market is revised to 456.8p – 457.4p.
Close and Limit Your Loss?You may decide to let your trade run or close it in order to restrict your losses. In this example you opt to close your bet by buying the market at 457.4p.
Your Profits/Losses = (Opening Price – Settlement Price) x stake per penny
(446.5p – 457.4p) x £10 per penny
-10.9p x £10 per penny
Your Profits/Losses = -£109.00 loss


BP Notes:

  • Spread betting guide prices taken from Tradefair as of 9 November 2011
  • Investors could also spread bet on the oil company’s share price in euros/penny and US dollars/penny

AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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