If we look at the Vodafone bet, the actual total notional value, your ultimate risk is 1,501 pounds, and that’s calculated by taking the stake and multiplying it by the price. The minimum margin we require, so the minimum amount of money you need in your account in order to open this trade for 5,100 shares, is 3%, that’s 45 pounds. For other markets in spread betting, it’s generally a fixed number multiplied by your stake, so if we take that actual 5,100 index, for example, the minimum is 30 multiples of your stake. If you do the minimum stake of one pound, the minimum amount of money you require is 30 pounds.

What this does is it gives you leverage, because rather like when you buy a house, you put a deposit down and you borrow the rest in a mortgage off the bank, so very similar here. You’ve leveraged yourself to the value of that property. What we’ve done here is for only 45 pounds on the Vodafone trade, we’re exposing ourselves to 1,501 pounds. So, leverage is a good thing in the respect that you don’t need very much money in your account in order to gain exposure to much, much more.

>>> Spread betting could be learnt by self no tuition is required