You can take advantage of rising and falling markets with Financial Spread Trading. Any profits you make are free from Stamp Duty and Capital Gains Tax but beware as this is a high risk form of investment.

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Financial Spread Trading examples

Index trade

You expect the UK 100 to rise from its current level of 6402. Barclays Financial Spread Trading is quoting a spread of 6401/6403 (selling at 6401, buying at 6403) on the Daily Funded Trade (DFT).

You open a long position with a £10 stake per point, buying at 6403.

Example 1 Winning trade

The UK 100 rises. When it reaches 6454 you decide to take your profits. Barclays is now quoting a spread of 6453/6455 so you sell at 6453.

You bought at 6403 and sold at 6453, an increase of 50 points. At £10 per point, this gives you a profit of £500.

Example 1 Losing trade

The UK 100 falls. When it reaches 6352 you cut your losses. Barclays is now quoting a spread of 6351/6353, so you sell at 6351.

You bought at 6403 and sold at 6351, a fall of 52 points. At £10 per point, your total loss is £520.

Equity trade

You believe Company Z’s shares are overvalued at 250p. Barclays Financial Spread Trading is quoting a spread of is 249p/251p on the shares. You open a short position with a £10 stake per point, selling at 249p.

Example 2 Winning trade

The share price falls. When they reach 196p you decide to take your profits. Barclays is now quoting a spread of 195/197p so you close your position at 197p.

You sold at 249p and bought at 197p, a fall of 52. At £10 a point, this gives you a profit of £520.

Example 2 Losing trade

The share price rises. When they reach 300p you decide to cut your losses.
Barclays is now quoting 299p/301p so you close your position at 301p.

You sold at 249p and bought back at 301p, a rise of 52p. At £10 a point, your total loss is £520.

Things to consider

  • Leverage
    Remember that leverage magnifies returns and losses in exactly the same way. So you could lose more than your initial deposit.
  • Deposit requirements
    To hold a Financial Spread Trading position, you need to have enough funds in your account to cover the margin requirement. If you don’t, we may make a ‘margin call’ to ask you to deposit funds.
  • Price movements
    If prices move against you, you will lose money unless you are able to close or amend your position straight away. We offer a range of stop loss orders to help you minimise losses.
  • No shareholder privileges
    Because you don’t own the assets your trading, you won’t receive voting rights, invitations to AGMs or other privileges. You’ll receive dividends (90% of net value) on long positions. On short positions, you will be debited for 90% of the net value of dividends.

Financial Spread Trading can magnify your return on investment. However, losses can also be magnified and so Financial Spread Trading should only be used by experienced traders who are comfortable with the risks associated.

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<a href="https://www.barclaystradinghub.co.uk/home/spread-trading/trading-examples.html"><img src="https://wealth.barclays.com/content/dam/bwpublic/global/images/aspect-ratio-1-0/BTH images/Financial_Spread_Trading_Final.jpg" alt="Financial Spread Trading Examples" width="640" border="0"/></a><br />Source: <a href="https://wealth.barclays.com">Barclays Wealth and Investment Management</a>

Barclays Financial Spread Trading is provided by GAIN Capital UK Ltd. All dealing, administration and settlement is carried out by them.

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