Bad Day at the Office
The political spread betting markets have given us all a good lesson… don’t forget that the markets can be way off, so judge your downside accordingly.
If you bought the Conservative Seats market because you thought they’d walk it, you might have bought the spread, as voting was under way on 8 June, at a price of 368 – 372.
If so, you would have lost (372 – the miserable 318 seats the Tories got) x your stake = (372 – 318) x your stake = losses of 54 x your stake.
If you were betting £10 per seat = 54 x £10 = £540 loss.
Shorting Labour Was Even WorseIf you shorted Labour on the day of the election, i.e. when the spread was 198 – 202, you’d also have taken a hit after Corbyn defied the odds and won an unexpected 262 seats.
You would have lost (262 – 198) x your stake = 64 x stake.
Again, betting £10 per seat = 64 x £10 = £640 loss.
Yes, You Can Win with Spread Betting But…The point of the real example above is to show how easily you (and the wider market) can get it wrong. And when that happens, spread betting can hurt.
Of course, you might have bought labour seats and/or sold the Tories, if so you’d have done well. Congratulations. See you down the pub.
In the meantime, the rest of us mortals should remember:
Also see Financial Spread Betting Just Isn’t That Easy.
Remember: Spread betting, CFDs and forex trading carry a high level of risk. You can lose more than your initial investment. These products are not suitable for all investors. Only speculate with money that you can afford to lose. Make sure you fully understand the risks involved and seek independent financial advice where necessary.