Lloyds Spread Betting Guide

Lloyds Spread Betting Guide

Lloyds Spread Betting Guide

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


Live Lloyds Chart and Prices



Where Can I Spread Bet on Lloyds?

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

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How to Spread Bet on Lloyds

For example, let’s assume you want to take a position on Lloyds, so you go on a spread betting website, like InterTrader, and they are offering the current market at:

Lloyds Rolling Daily: 27.6p – 27.9p

Here is what you need to know about how it works

The Market Lloyds Rolling Daily
The Spread 27.6p – 27.9p
How the Spread Works Now you can take a position on the Lloyds Rolling Daily market to go:

  arrow_upward  Above 27.9p, or
  arrow_downward  Below 27.6p

This is a Rolling Daily market which means that there is no expiry date for this spread bet. If you decide not to close your position and the session ends then your trade will roll over into the next session.

If a trade does roll over then you will either be credited or charged for overnight financing based upon whether you are betting on the market to go up or down.

For more details see how a daily spread bet works.
Units (Points) Traded Financial spread bets on the Lloyds market are made in £x per penny.

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

E.g. if Lloyds changes by 30p then you would win / lose 30 multiples of your stake.
Trade Size You work out how much you would like to stake per penny, e.g. £2 per penny, £4 per penny, £8 per penny etc.
Quick Example If, as an example, you went with a stake of £5 per penny and Lloyds moves 35p, you would lose/win £5 per penny x 35p = £175.


Worked Example | Taking a Long Position on Lloyds

Spread betting on the share price of the UK bank rise

You Decide Whether to Buy or Sell Lloyds moving:

  arrow_upward  Above 27.9p? or
  arrow_downward  Below 27.6p?

You Might Choose to Buy   arrow_upward  Above 27.9p
You Choose How Much to Risk, Selecting £25 per penny
So Now What?
  • You win £25 for every penny Lloyds goes above 27.9p
  • You make a loss of £25 for each penny Lloyds decreases below 27.9p
If You Are Going Long of a Market Your P/L = (Final Value – Initial Value) x stake per penny
 
Trading Example 1 Lloyds increases and the spread betting market changes to 31.2p – 31.5p.
Close and Take a Profit? At this point, you can opt to keep your position open or close it, i.e. close your trade to lock in your profit. In this example you decide to settle your position and sell at 31.2p.
Your P/L = (Final Value – Initial Value) x stake per penny
(31.2p – 27.9p) x £25 per penny
3.3p x £25 per penny
Your P/L = £82.50 profit
 
Trading Example 2 Lloyds moves lower and the financial spread betting market moves to 25.1p – 25.4p.
Close and Restrict Your Loss? At this point, you could decide to let your spread bet run or close it and limit your loss. In this instance you choose to settle your trade by selling at 25.1p.
Your P/L = (Final Value – Initial Value) x stake per penny
(25.1p – 27.9p) x £25 per penny
-2.8p x £25 per penny
Your P/L = -£70.00 loss


Worked Spread Betting Example | Taking a Bearish View of Lloyds

Financial spread trading on the bank’s share to go down

You Now Work Out Whether to Go Long or Short Lloyds to push:

  arrow_upward  Above 27.9p? or
  arrow_downward  Below 27.6p?

Let’s Say You Decide to Go Short   arrow_downward  Below 27.6p
You Choose Your Stake, Let’s Assume You Choose £20 per penny
So What Happens Next?
  • You make a loss of £20 for each penny Lloyds pushes higher than 27.6p
  • You win £20 for each penny Lloyds moves lower than 27.6p
If You Sell a Market Your P/L = (Initial Value – Final Value) x stake per penny
 
Trading Example 3 Lloyds goes lower and the market adjusts and moves to 21.8p – 22.1p.
Lock in a Profit? At this point, you may decide to keep your spread bet open or close it to lock in your profit. In this case you opt to settle your bet and buy at 22.1p.
Your P/L = (Initial Value – Final Value) x stake per penny
(27.6p – 22.1p) x £20 per penny
5.5p x £20 per penny
Your P/L = £110.00 profit
 
Trading Example 4 Lloyds climbs and the spread trading market is revised and is set at 31.9p – 32.2p.
Time to Restrict the Loss?At this point, you can decide to keep your trade open or close it, i.e. close your trade and limit your loss. In this example you choose to settle your bet and buy the market at 32.2p.
Your P/L = (Initial Value – Final Value) x stake per penny
(27.6p – 32.2p) x £20 per penny
-4.6p x £20 per penny
Your P/L = -£92.00 loss


Lloyds Bank Notes:

  • Price taken from the Financial Spreads platform: 9 November 2011
  • Most spread betting companies will also give you the option of trading on Lloyds in euros/penny and dollars/penny

AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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