Sugar Spread Betting Guide

Sugar Spread Betting Guide

Sugar Spread Betting Guide

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


Live Sugar Chart and Prices



Where Can I Spread Bet on Sugar?

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

Company Commodity
Markets?
Commodities
Min Stake
Mobile
Apps
Guaranteed Stop Free If Not Triggered? Inactivity Fee Trading Offer Apply
Financial Spreads Review check_box £0.50 check_boxiOS
check_boxAndroid
check_box £0 check_box Apply
City Index Review check_box £0 check_boxiOS
check_boxAndroid
cancel £0 cancel Apply
ETX Capital Review check_box &pound:0.50 check_boxiOS
check_boxAndroid
cancel £15 cancel Apply
IG Review check_box £1-5 check_boxiOS
check_boxAndroid
check_boxWindows
check_box £12 cancel Apply
InterTrader Review check_box &pound:1 check_boxiOS
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cancel £0 check_box Apply


How to Spread Bet on Sugar

For example, let’s say that you want to speculate on Sugar, so you go on a spread betting site, such as Financial Spreads, and see they are offering the current quote priced at:

Sugar (March) Futures: $23.57 – $23.63

This is what happens with a futures spread betting market…

Spread Trading Market: Sugar (March) Futures
The Spread Betting Price: $23.57 – $23.63
This Means: You can trade on the Sugar Futures market settling:

  arrow_upward  Above $23.63, or
  arrow_downward  Below $23.57

At the close of trading on the expiry date for the ‘March’ futures market, 16 February 2012.

It is important to bear in mind that with a futures spread bet your trade will be closed when the March Sugar futures markets are settled, 16 February 2012. Nevertheless, you can close your trade prior to the closing date.
Units (Points) Traded: Trades on the Sugar market are priced in £x per cent.

Where a cent is $0.01 of the commodity’s price movement.

E.g. if Sugar moves by 30¢ ($0.30) then you would win / lose 30 times your stake.
Trade Size: You work out your stake per cent, e.g. £1 per cent, £5 per cent, £10 per cent etc.
Simplified Trading Example: If, as an example, you had a stake of £4 per cent and Sugar changes by $0.22 (22¢), you would lose or gain £4 per cent x 22¢ = £88.


Worked Spread Betting Example | Taking a Long Position on Sugar

Spread betting on the commodity to move up

You Work Out Whether to Buy or Sell: Do you believe that Sugar will settle on 16 February 2012:

  arrow_upward  Above $23.63? or
  arrow_downward  Below $23.57?

Let’s Say You Want to Go Long:   arrow_downward  Above $23.63
You Select Your Stake, Let’s Assume You Choose: £5 per cent
So What Next?
  • You make a gain of £5 for each cent ($0.01) Sugar closes above $23.63
  • You lose £5 for every cent ($0.01) Sugar settles lower than $23.63
When You Buy a Spread Bet Your Trading P/L = (Closing Price – Opening Price) x stake per cent
 
Situation 1 Sugar climbs and the futures market is adjusted and moved to $23.84 – $23.90.
Take a Profit? You may now choose to keep your bet open until expiry or close it and take your profit. In this instance you choose to close your bet early and sell at $23.84.
Your Trading P/L = (Closing Price – Opening Price) x stake per cent
($23.84 – $23.63) x £5 per cent
$0.21 x £5 per cent
21¢ x £5 per cent
Your Trading P/L = £105 profit
 
Situation 2 Sugar falls and the quote for the futures market is revised to $23.39 – $23.45.
Restrict Your Loss? You may now choose to let your position run to expiry or close it, i.e. close your position and restrict your losses. In this instance you decide to settle your trade by selling the market at $23.39.
Your Trading P/L = (Closing Price – Opening Price) x stake per cent
($23.39 – $23.63) x £5 per cent
-$0.24 x £5 per cent
-24¢ x £5 per cent
Your Trading P/L = -£120 loss


Fully Worked Spread Trading Example | Taking a Bearish View of Sugar

Online spread betting on the commodity to move lower

You Choose Whether to Go Long or Short: Your research leads you to think that Sugar will finish at on 16 February 2012:

  arrow_upward  Above $23.63? or
  arrow_downward  Below $23.57?

Let’s Assume You Want to Sell:   arrow_downward  Below $23.57
You Choose Your Stake Size, Let’s Say You Choose: £3 per cent
What Next?
  • You lose £3 for every cent ($0.01) Sugar settles above $23.57
  • You make a gain of £3 for every cent ($0.01) Sugar closes below $23.57
When Selling a Market Your Trading P/L = (Opening Price – Closing Price) x stake per cent
 
Situation 3 Sugar drops and the market is moved to $23.21 – $23.27.
Lock in Your Profit? At this point, you may choose to keep your futures spread bet open until expiry or close it, i.e. close your position to lock in your profit. In this example you choose to close your trade at the current rate and buy the market at $23.27.
Your Trading P/L = (Opening Price – Closing Price) x stake per cent
($23.57 – $23.27) x £3 per cent
$0.30 x £3 per cent
30¢ x £3 per cent
Your Trading P/L = £90 profit
 
Situation 4 Sugar increases and the price of the spread betting futures market is revised and set at $23.84 – $23.90.
Time to Restrict the Loss?At this point, you can decide to keep your bet open until expiry or close it, i.e. close your trade to limit your losses. For this example, you choose to close your bet at the current quote by buying the market at $23.90.
Your Trading P/L = (Opening Price – Closing Price) x stake per cent
($23.57 – $23.90) x £3 per cent
-$0.33 x £3 per cent
-33¢ x £3 per cent
Your Trading P/L = -£99 loss


Sugar Notes:


AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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