Going long & short

When you open a Spread Betting position you simply speculate on whether you think the markets will move up or down. This means that the more a price moves in your favour, the more money you make; the more the price moves against you, the more money you lose.

'Going long'

If you think the price will rise, you buy in the hope of selling at a higher price. This is called 'going long'.

For example, the FTSE 100 Daily quote is 4525 / 4527. You decide that the FTSE is due to rise and choose to buy at £10 per point. This means that when you close your bet you would receive £10 for every point that the sell price had risen above 4527, or pay £10 for every point that the price had fallen below 4527

'Going short'

'Going short' or 'shorting' is simply the flip-side of going long. If you think the price will fall, you sell in the hope of buying back at a lower price. This is a significant benefit of Spread Betting as it allows you to trade in any market condition, provided you trade the right way of course.

A common question is: How can I sell something that I don't own?' A Spread Bet simply takes a view on the direction in which the price moves. At no point do you own the underlying security, whether you go long or short.

Let's now assume you think the FTSE 100 Daily (4525 - 4527) is going to fall. You sell at £10 per point meaning that when you close your bet you would receive £10 for every point that the buy price had fallen below 4525, or pay £10 for every point that the price had risen above 4525.

In summary

Please note that all of the examples included on this website are for illustration purposes only. This example shows the impact of a price movement on your profit and loss only, and excludes the impact of dividends and financing, which are covered later on.