Guide to the US vs UK Stock Market Differential

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Financial Spreads: Spread Betting and CFD Trading
Wall Street 30 / UK 100 Differential Spread Betting

Where Can I Spread Bet on the Wall Street 30 / UK 100 Differential?

FinancialSpreads provides clients with a range of spread betting markets like the Wall St 30 / UK 100 differential but also individual indices such as the Germany 30, France 40 and Japan 225.

Where Can I Access Live Wall Street 30 / UK 100 Differential Prices?

Financial Spreads offers investors real-time prices on over a thousand financial spread betting markets like the Wall St 30 / UK 100 differential and a wide variety of other stock market indices, foreign exchange, shares and commodities prices.

Where Can I Get Live Wall Street 30 / UK 100 Differential Charts?

When using a Financial Spreads account investors can look at up-to-the-minute candlestick charts for the Wall St 30 / UK 100 differential and more than a thousand other markets.

As well as several display styles, the package comes with a large range of advanced functions including:
Example index chart:

Stock Market Index Spread Betting Charts



How to Financial Spread Bet on the Wall St 30 / UK 100 Differential

As an example, let's assume you look at FinancialSpreads.com and the live price is:

  Wall St 30 / UK 100 Differential March Sell

11063.6
Buy

11067.4


This is a brief guide to how it works

The Spread Betting MarketWall St 30 / UK 100 Differential March Futures
Spread11063.6 - 11067.4
This MeansNow you can take a position on the Wall St 30 / UK 100 futures market closing:

  Spread Betting Higher than 11067.4, or
  Spread Betting Lower than 11063.6

On the closing date for this March market, 19 March 2015. This is a 'Futures' spread trading market, therefore your trade will automatically be closed on the settlement date. Having said that, usually you can also close your position, during market hours, prior to the expiry date.

Also consider that these futures markets do not have overnight fees.
Traded UnitsSpread betting trades on the Wall St 30 / UK 100 differential market are priced in £x per point.

Where a point is 1 point of the market's price movement.

E.g. if the Wall St 30 / UK 100 differential moves 35 points then you would lose / win 35 times your stake.
StakeYou decide how much you would like to trade per point, e.g. £1 per point, £4 per point, £20 per point etc.
Brief Staking ExampleWith that in mind, if your stake is £4 per point and the Wall St 30 / UK 100 differential changes by 30 points, you would win or lose £4 per point x 30 points = £120.


Worked Spread Betting Example - Taking a Long Position on the Wall St 30 / UK 100 Differential

Financial spread trading on the differential market to increase in value

You Now Consider Whether to Go Long or Short The Wall St 30 / UK 100 differential market to close:

  Spread Betting Higher than 11067.4? or
  Spread Betting Lower than 11063.6?

When the contract is settled (expires), 19 March 2015.

Let's Assume You Choose to Go Long   Spread Betting Higher than 11067.4
You Select How Much to Risk, Let's Assume You Choose £3 per point
What Happens Next?
  • You will win £3 for each point the Wall St 30 / UK 100 Differential pushes higher than 11067.4
  • You lose £3 for every point the Wall St 30 / UK 100 Differential goes lower than 11067.4
When Speculating on a Market to Increase Your P&L = (Closing Price - Initial Price) x stake
 
Scenario 1
The American markets outperform their UK counterparts and so the Wall St 30 / UK 100 differential widens, with the spread betting market changing to 11106.1 - 11109.9. I.e. you'd see:   11106.1   11109.9
Lock in Your Profit? At this point, you can choose to leave your trade open, and possibly let it run to the expiry date, or close it to lock in a profit. For this example, you opt to settle your trade and sell the market at 11106.1.
Your P&L = (Closing Price - Initial Price) x stake
(11106.1 - 11067.4) x £3 per point
38.7 points x £3 per point
Your P&L = £116.10 profit
 
Scenario 2
The Wall St 30 / UK 100 differential falls.
Restrict Your Loss? At this point, you could opt to let your position run to expiry or close it in order to restrict your loss. In this instance, you opt to run the trade until expiry. The futures market finally settles at 11023.1.
Your P&L = (Closing Price - Initial Price) x stake
(11023.1 - 11067.4) x £3 per point
-44.3 points x £3 per point
Your P&L = -£132.90 loss


Spread Trading Example - Selling the Wall St 30 / UK 100 Differential

Online spread betting on the differential market to go down

You Now Decide Whether to Buy or Sell The Wall St 30 / UK 100 Differential settling:

  Spread Betting Higher than 11067.4? or
  Spread Betting Lower than 11063.6?

When the market expires, 19 March 2015.

Let's Assume You Want to Sell   Spread Betting Lower than 11063.6
You Select Your Stake, Let's Assume You Select £4 per point
What Now?
  • You lose £4 for every point the Wall St 30 / UK 100 differential goes above 11063.6
  • You will win £4 for every point the Wall St 30 / UK 100 differential pushes lower than 11063.6
If You Are Betting on a Market to Decrease Your P&L = (Initial Price - Closing Price) x stake
 
Scenario 3
The Wall St 30 / UK 100 differential market goes lower
Time to Lock in a Profit? You may decide to leave your position open, and maybe let it run to the expiry date, or close it, i.e. close your trade for a profit. In this instance, you choose to let your position run until the market expires. The contract finally settles at 11021.0.
Your P&L = (Initial Price - Closing Price) x stake
(11063.6 - 11021.0) x £4 per point
42.6 points x £4 per point
Your P&L = £170.40 profit
 
Scenario 4
The Wall St 30 / UK 100 differential pushes higher and the financial spread betting market is adjusted to 11108.5 - 11112.3, i.e. on Financial Spreads you'd see:   11108.5   11112.3
Limit Your Loss?At this point, you may decide to leave your trade open, and maybe let it run to the settlement date, or close it to limit your losses. In this example you decide to close your bet and buy at 11112.3.
Your P&L = (Initial Price - Closing Price) x stake
(11063.6 - 11112.3) x £4 per point
-48.7 points x £4 per point
Your P&L = -£194.80 loss

Where Can I Practice Financial Spread Betting on the Wall Street 30 / UK 100 Differential?

FinancialSpreads.com provides you with the option of trying new trading theories by using a free Practice Account, markets include the Wall St 30 / UK 100 differential.

The Demo Account offers a wide range of markets such as stock market indices, currencies, commodities and shares.

Open a Spread Betting and CFD Trading Demo Account


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Also see:
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