Soybean Spread Betting Guide

Soybean Spread Betting Guide

Soybean Spread Betting Guide

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


Live Soybean Chart and Prices



Where Can I Spread Bet on Soybean?

Most spread betting brokers offer prices and charts on commodities including Soybean e.g.:

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How to Spread Bet on Soybean

Let’s say you are thinking of taking a position on Soybean, you go on a financial spread betting site, e.g. InterTrader, and see the real-time quote:

Soybean (March) Futures: $1,221 – $1,223

This is what happens with a futures spread betting market.

The Spread Betting Market Soybean (March) Futures
The Spread $1,221 – $1,223
This Means You can spread bet on the Soybean Futures market closing:

  arrow_upward  Higher than $1,223, or
  arrow_downward  Lower than $1,221

At the close of trading on the closing date for this ‘March’ futures market, 20 February 2012.

It should be noted that, because this is a futures trade, your position will be automatically closed when the March Soybean futures market expires, 20 February 2012. However, you can also decide to close your trade prior to the expiry date.
Trading Units Futures bets on the Soybean market are made in £x per $1.

Where $1 is $1 of the commodity’s price movement.

E.g. if Soybean moves $40 then you would gain or lose 40 times your stake.
Stake Size You work out your stake per $1, e.g. £1 per $1, £4 per $1, £20 per $1 etc.
Quick Staking Exercise With that in mind, if you decided on a stake of £4 per $1 and Soybean changes by $28, you would lose or win £4 per $1 x $28 = £112.


Spread Betting Example | Taking a Long Position on Soybean

Financial spread trading on the commodity to increase

You Work Out Whether to Go Long or Short Does your research lead you to believe that Soybean will finish at on 20 February 2012:

  arrow_upward  Higher than $1,223? or
  arrow_downward  Lower than $1,221?

You Might Want to Buy   arrow_downward  Higher than $1,223
You Select Your Stake Size, Choosing £3 per $1
What Happens Now?
  • You will win £3 for every $1 Soybean settles above $1,223
  • Your trade loses £3 for each $1 Soybean settles lower than $1,223
When Spread Betting on a Market to Rise Your Profit or Loss = (Settlement Value – Initial Value) x stake per $1
 
Trading Example 1 Soybean increases and the market is revised to $1,254 – $1,256.
Close and Take Your Profit? You may choose to keep your futures spread bet open until expiry or close it, i.e. close your trade to lock in your profit. In this example you choose to close your trade at the current rate by selling at $1,254.
Your Profit or Loss = (Settlement Value – Initial Value) x stake per $1
($1,254 – $1,223) x £3 per $1
$31 x £3 per $1
Your Profit or Loss = £93 profit
 
Trading Example 2 Soybean drops and the spread betting market adjusts and moves to $1,187 – $1,189.
Time to Restrict Your Loss? At this point, you may opt to keep your bet open until expiry or close it, i.e. close your trade to limit your losses. In this example you opt to close your position early and sell at $1,187.
Your Profit or Loss = (Settlement Value – Initial Value) x stake per $1
($1,187 – $1,223) x £3 per $1
-$36 x £3 per $1
Your Profit or Loss = -£108 loss


Worked Spread Trading Example | Going Short of Soybean

Online spread betting on the commodity to decrease

You Decide to Buy or Sell Your research leads you to believe that Soybean will close on 20 February 2012:

  arrow_upward  Higher than $1,223? or
  arrow_downward  Lower than $1,221?

Let’s Assume You Decide to Sell   arrow_downward  Lower than $1,221
You Select How Much to Risk, Let’s Say You Select £2 per $1
So What Now?
  • Your trade loses £2 for each $1 Soybean closes higher than $1,221
  • You will win £2 for each $1 Soybean settles below $1,221
When Selling a Spread Bet Your Profit or Loss = (Initial Value – Settlement Value) x stake per $1
 
Trading Example 3 Soybean moves lower and the financial spread betting market is revised and moved to $1,166 – $1,168.
Take a Profit? You could choose to keep your futures trade open until expiry or close it to take a profit. In this example you decide to settle your position now by buying the market at $1,168.
Your Profit or Loss = (Initial Value – Settlement Value) x stake per $1
($1,221 – $1,168) x £2 per $1
$53 x £2 per $1
Your Profit or Loss = £106 profit
 
Trading Example 4 Soybean pushes higher and the quote for the financial spread betting market changes to $1,282 – $1,284.
Close and Restrict Your Loss?You may opt to let your bet run to expiry or close it, i.e. close your position and limit your loss. For this example, you opt to settle your position by buying at $1,284.
Your Profit or Loss = (Initial Value – Settlement Value) x stake per $1
($1,221 – $1,284) x £2 per $1
-$63 x £2 per $1
Your Profit or Loss = -£126 loss


Soybean Notes:


AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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