What you have to be aware of is, you see, you might have gotten it wrong. If before you had thought that Vodafone’s share price would fall from 149.8, and subsequently has risen, you would have to have bought back at 161.4, and that would have incurred a loss of 116 pounds. How does it work, that’s a very basic example.

How do I actually go about, what do I have to do before I can open a trade. Well, with spread betting, you’re trading on margin. Margin, in its simplest form, is the amount of money you need in your account, before you can open a trade. The amount of margin you need in your account differs from market to market, and generally on the whole it can be seen as a measure of volatility. Some markets you’ll see you need a lot more in your account before you can open a position than other markets. Generally, on the whole, the rule is that for shares the margin is a percentage of your total notional value.

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