HSBC Spread Betting Guide

HSBC Spread Betting Guide

HSBC Spread Betting Guide

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


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Where Can I Spread Bet on HSBC?

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

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How to Spread Bet on HSBC

Let’s assume you are thinking of taking a position on HSBC, you look on a financial spread betting site, such as FinancialSpreads, and they are offering the real time market:

HSBC Rolling Daily: 502.7p – 503.4p

This is what you need to know about how it works…

The Spread Betting Market: HSBC Rolling Daily
Spread Betting Price: 502.7p – 503.4p
This Means: You can trade on the HSBC Rolling Daily market to push:

  arrow_upward  Higher than 503.4p, or
  arrow_downward  Lower than 502.7p

This market is a ‘Rolling Daily’ market and so there is no settlement date. If you don’t close your position and the trading session ends then your position will automatically roll over into the next trading session.

Note: if a trade is rolled over then you will normally either receive or be charged interest for overnight financing depending on whether you are betting on the market to rise or fall.

To learn more also see how a rolling spread bet works.
Traded Units: Spread trades on the HSBC market are priced in £x per penny.

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

E.g. if HSBC changes by 50p then you would lose or gain 50 multiples of your stake.
Stake Size per Unit: You decide how much you would like to trade per penny, e.g. £1 per penny, £3 per penny, £8 per penny etc.
Short Staking Exercise: With that in mind, if you chose a stake of £4 per penny and HSBC moves 33p, you would lose / win £4 per penny x 33p = £132.


Spread Trading Example | Going Long of HSBC

Spread betting on the UK equity to increase in value

You Now Consider Whether to Go Long or Short: HSBC moving:

  arrow_upward  Higher than 503.4p? or
  arrow_downward  Lower than 502.7p?

Let’s Say You Want to Go Long:   arrow_upward  Higher than 503.4p
You Select Your Stake Size, Let’s Say You Opt For: £10 per penny
What Happens Next?
  • You win £10 for every penny HSBC goes higher than 503.4p
  • Your trade loses £10 for each penny HSBC falls below 503.4p
When Buying a Spread Bet Your P/L = (Final Level – Initial Level) x stake per penny
 
Trading Scenario 1 HSBC pushes higher and the spread trading market becomes 515.5p – 516.2p.
Close for a Profit? At this point, you could choose to leave your trade open or close it for a profit. For this example, you opt to close your bet by selling at 515.5p.
Your P/L = (Final Level – Initial Level) x stake per penny
(515.5p – 503.4p) x £10 per penny
12.1p x £10 per penny
Your P/L = £121.00 profit
 
Trading Scenario 2 HSBC slips and the shares spread betting market is revised to 489.6p – 490.3p.
Time to Limit Your Loss? You can decide to keep your bet open or close it, i.e. close your trade to restrict your losses. For this example, you decide to settle your bet by selling the market at 489.6p.
Your P/L = (Final Level – Initial Level) x stake per penny
(489.6p – 503.4p) x £10 per penny
-13.8p x £10 per penny
Your P/L = -£138.00 loss


Fully Worked Trading Example | Going Short of HSBC

Spread betting on the share price of the UK bank to fall

You Select Whether to Go Long or Short: HSBC to go:

  arrow_upward  Higher than 503.4p? or
  arrow_downward  Lower than 502.7p?

Let’s Assume You Sell:   arrow_downward  Lower than 502.7p
You Decide How Much to Risk, Let’s Assume You Select: £5 per penny
Now What Happens?
  • Your trade loses £5 for each penny HSBC rises above 502.7p
  • You win £5 for each penny HSBC pushes lower than 502.7p
When Betting on a Market to Decrease Your P/L = (Initial Level – Final Level) x stake per penny
 
Trading Scenario 3 HSBC decreases and the market is adjusted to 481.5p – 482.2p.
Lock in a Profit? At this point, you could decide to leave your spread bet open or close it, i.e. close your trade to lock in your profit. For this example, you choose to close your bet by buying the market at 482.2p.
Your P/L = (Initial Level – Final Level) x stake per penny
(502.7p – 482.2p) x £5 per penny
20.5p x £5 per penny
Your P/L = £102.50 profit
 
Trading Scenario 4 HSBC moves higher and the spread betting market moves to 525.5p – 526.2p.
Close and Restrict Your Loss?At this point, you may decide to leave your spread bet open or close it, i.e. close your trade and limit your loss. In this case you opt to settle your trade and buy the market at 526.2p.
Your P/L = (Initial Level – Final Level) x stake per penny
(502.7p – 526.2p) x £5 per penny
-23.5p x £5 per penny
Your P/L = -£117.50 loss


HSBC Notes:

  • Spread trading market from FinancialSpreads, 7 December 2011
  • Many spread betting companies will also allow you to spread bet on the UK bank in euros/penny and dollars/penny

AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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