A - C
SPREAD BETTING GLOSSARY
Bet size
Governs how much you make or lose on a spread bet for every point of movement in the price of the market. This is also known as stake size.
SPREAD BETTING GLOSSARY
Bid
Spreadex’s spread betting quotes are made up of two prices – one at which you can sell and one at which you can buy. The level at which you can sell is always the lower of the two prices and is called the bid.
SPREAD BETTING GLOSSARY
Buy (also see Up Bet)
You ‘buy’ a market if you think it will go up in price. You can also ‘buy’ to close out an existing ‘sell’ bet. When you buy, you buy at the ‘ask’ price, which is the higher price of the spread quoted.
In Sports, you buy if you think the result will be higher than our quote (say more points in a rugby match) and you buy at the higher of the two prices quoted (e.g. 46-49, you buy at 49).
SPREAD BETTING GLOSSARY
Cable
Trader jargon referring to the Sterling/US Dollar exchange rate. So called because the rate was originally transmitted between the London and New York exchanges via the transatlantic telegraph cable beginning in the mid 1800s.
SPREAD BETTING GLOSSARY
Cash price (also see Spot Rate)
The price of an asset for immediate delivery. In other words, the actual price of an instrument right now; this term is often used for stock indices, whereas the synonymous term of spot is more often applied to forex and commodity prices.
SPREAD BETTING GLOSSARY
Closing
The process of ending (or trading out of) an existing bet. Closing a bet results in a profit or loss being realised. A financial bet can be closed automatically when it hits a limit order or stop loss limit, or closed manually by entering an opposing bet in the market to the open position, or on the expiration of the contract such as a future.
In sports a bet can be closed in a similar way by making an opposing bet, or the bet is closed when the outcome of the event has been decided and the market is settled by our traders.
SPREAD BETTING GLOSSARY
Controlled Risk Bet
A bet which has a strictly limited maximum loss by virtue of a Guaranteed Stop. This kind of bet prevents you from taking a larger loss than expected if something ‘gaps through’ overnight, for example, due to a major news event. A small premium is charged to place a Controlled Risk Bet. Another way of describing a Controlled Risk Bet is to say you have a ‘Guaranteed Stop’ on your trade.
SPREAD BETTING GLOSSARY
Credit Limit
When applying for your account you can request a credit facility – this is a flexible way of allowing you to place trades on credit so that you can maximise your trading opportunities without needing to deposit funds to cover the Notional Trading Requirement (NTR). Credit limits are subject to status and a credit check.
SPREAD BETTING GLOSSARY
Credit Rating
When you open an account with Spreadex you will be assigned a credit rating. This determines how much you are required to deposit for each sports spread bet only.
SPREAD BETTING GLOSSARY
Currency Pair
The two currencies that comprise a foreign exchange (or forex, FX) rate. A foreign exchange rate is the amount that the first currency in the pair is worth expressed in terms of the second currency. When trading a currency pair, if you expect the first named currency to appreciate in price versus the second currency you would buy the currency pair.
D - E
SPREAD BETTING GLOSSARY
Daily Bet
A type of spread bet that expires on the same day. The bet is settled as per the rules in our Market Information Sheets.
SPREAD BETTING GLOSSARY
Dealing Spread
Difference between the two ends of our quoted price. You make an Up Bet ('buy') at the higher end of the spread and make a Down Bet ('sell') at the lower end of the spread.
SPREAD BETTING GLOSSARY
Deposit
The funds required as an initial outlay for a bet. It is not the total amount that can be lost on the bet.
SPREAD BETTING GLOSSARY
Discount
The amount by which a price for one instrument is less than that of another instrument. The term is also used in forex markets to describe the amount by which forward currency rates are less than spot rates.
SPREAD BETTING GLOSSARY
Dividend
The part of a company's profits distributed to shareholders. An interim dividend is paid at the half-year stage and a final dividend at the end of the full year. If you have a short rolling position in a share that goes ‘ex-dividend’ your account will be debited with 90% of the gross dividend (or 100% of the net dividend), and if you are holding a ‘long’ (buy) position, your account will be credited with 90% of the gross dividend (or 100% of the net dividend).
SPREAD BETTING GLOSSARY
Down Bet (also see 'Sell')
A spread bet placed in anticipation that a particular price will fall for a financial instrument or that a sports market will finish lower than our quote. For example if you think the price of gold is going to fall you place a sell bet at our bid price. If you think a cricketer will score less runs than the 46-50 runs we quote you would place a down bet at 46.
SPREAD BETTING GLOSSARY
Downtrend
A price trend characterised by a series of lower highs and lower lows.
SPREAD BETTING GLOSSARY
Ex-dividend
A share bought without the right to receive the next dividend which is retained by the seller.
SPREAD BETTING GLOSSARY
Expiration/Expiry
The date and time at which a bet will close. Expiration occurs daily for daily bets or the 3rd Friday of the month for some monthly and quarterly contracts – see our Market Information Sheets for full details of all contracts expiry dates and times. On Expiration all bets are settled at the relevant closing price at the time specified in the Market Information Sheets.
F - H
SPREAD BETTING GLOSSARY
Fill
The execution of an order. This is trader speak for saying an order has been executed – ‘you have been filled on your Barclays trade at £3.65’.
SPREAD BETTING GLOSSARY
Financial Trading Limit
Total of all money deposited, taking into account the balance of winnings/ losses from closed bets, plus winnings/ losses on open bets, plus any credit allowance less Notional Trading Requirement (NTR) after taking into consideration any waived NTR facility.
SPREAD BETTING GLOSSARY
Force Majeure
In our reasonable opinion an emergency or an exceptional market condition, including but not limited to, the following:
Any act, omission event or circumstance beyond our control such as strike, riot, terrorist attack, civil unrest, war, evacuation of premises, or failure of supply communications or other infrastructure which in our reasonable opinion prevents us from maintaining an orderly market in any one or more of our betting markets.
The suspension, closure or abandonment of any underlying market or event, with the result that we are in our reasonable opinion unable to maintain an orderly market in one or more of our betting markets.
The imposition of betting limits or special or unusual terms in the underlying markets upon which our markets are based with the result that we are in our reasonable opinion unable to maintain an orderly market in any one or more of our betting markets.
The occurrence of excessive movement or loss of liquidity in the underlying markets upon which our betting markets are based, such that in our reasonable opinion we are unable to maintain an orderly market in any one or more of our betting markets.
The occurrence of any technical or mechanical failure, or power failure, or any failure the result of which is that our computing equipment does not function fully, or any other failure whatsoever, so long as the result of the failure in question is that we in our reasonable opinion in all of the circumstances prevailing at the time believe that it would be commercially imprudent for us to allow normal trading to continue. We reasonably believe that any one or more of the circumstances set out above is or are about to occur.
SPREAD BETTING GLOSSARY
Foreign Exchange (Forex, FX, currency)
The simultaneous buying of one currency and selling of another.
SPREAD BETTING GLOSSARY
Future or Forward
A future or forward rate is notionally an agreement to conduct a transaction at some specified time in the future where the price is agreed now. For a spread bet on a future it means that the expiry date is at some point in the future. Often the price of a future will differ from the cash price to take into account the effects that dividends, interest rates, or for commodities, storage rates have on holding the instrument to expiry.
SPREAD BETTING GLOSSARY
Gap
The phenomenon of a market trading at a price away from the previous traded price without trades occurring at intervening prices: more usually, but not necessarily, relates to when a market resumes trading after a period of closure.
SPREAD BETTING GLOSSARY
Gearing (also see Leverage)
The relationship between potential profit or loss and the initial outlay. A position with high gearing or leverage stands to make or lose a large amount from a small initial outlay.
SPREAD BETTING GLOSSARY
Guaranteed Stop
A Stop-loss order that puts an absolute limit on your liability, eliminating the chance of slippage and guaranteeing an exit price for your trade. This is the same as a Controlled Risk Bet (above).
SPREAD BETTING GLOSSARY
Hedge
A trade or position that reduces or eliminates the risk of loss from an adverse price movement in a position already held.
I - M
SPREAD BETTING GLOSSARY
Initial Margin
See Notional Trading Requirement, below.
SPREAD BETTING GLOSSARY
In-Play/In-Running Betting
Placing a bet on a sporting event after it has started. Our sports traders price up many sports markets ‘In-Play’ or ‘In-Running’ allowing you to close a bet during a game or open a new one depending on your current view of proceedings.
SPREAD BETTING GLOSSARY
Last Dealing Day
The last day on which you may deal in a particular market, for opening or closing trades. This may or may not coincide with the settlement date for a bet.
SPREAD BETTING GLOSSARY
Last Dealing Time
The last time (on the last dealing day) you may bet on a particular market.
SPREAD BETTING GLOSSARY
Leverage (also see Gearing)
Leverage or gearing allows traders to gain a large exposure with a relatively small outlay.
SPREAD BETTING GLOSSARY
Limit Order
An instruction to deal if the price moves to a level at which you would like to place a trade – for example, you could place a limit order to buy the UK100 if it drops to 4500 or sell it if it goes to 5000. The order can be placed as ‘Good Till Cancelled’ meaning it will stay live in the market until you cancel it or ‘Good For Day’ meaning it will stay live until that day’s expiry time.
SPREAD BETTING GLOSSARY
Liquid/ Illiquid
A liquid market has a sufficient volume of two-way business for trade to occur without moving prices unduly and will normally exhibit narrow bid-offer spreads. In an illiquid market, a small amount of business often moves prices a disproportionate amount, and bid and offer prices can be far apart.
SPREAD BETTING GLOSSARY
Long Position
A position taken in anticipation of a rising market. To go long means to buy.
SPREAD BETTING GLOSSARY
Make-Up
The final result of a spread bet in a sports market and the basis on which we settle sports bets. If the final score in a rugby match was 42-10, the make-up for Total Points would be 52 (42+10) and the Supremacy would make-up at 32 (42-10).
SPREAD BETTING GLOSSARY
Margin
See Notional Trading Requirement, below.
SPREAD BETTING GLOSSARY
Market Order
An instruction to open or close a trade at a price which is specified before the market reaches it. Market orders are only available on selected markets. Such orders may be placed or (save in the case of a market order which we impose) cancelled at any time during our normal business hours. Market orders are not guaranteed, whether or not they are imposed, and are vulnerable to ‘gapping through’. Market Orders are also known as ‘Limit Orders’.
SPREAD BETTING GLOSSARY
Match Bet
A sports bet in which we price up one participant against another and you can get ‘for’ or ‘against’ either participants. For example, we price up a Match Bet on every horse race where we pitch one horse against another. It doesn’t matter who wins the race, your bet is on who will win between the two chosen runners. Match bets are also available in Golf where we price up one golfer against another over 18 or 72 holes so you can bet on how just these two players will perform against each other.
N - Q
SPREAD BETTING GLOSSARY
NMS
The Exchange Market Size (formerly known as Normal Market Size) represents the exchange-specified quantity of shares which a market maker is obliged to quote a two price on in the underlying market.
SPREAD BETTING GLOSSARY
NTR - Notional Trading Requirement (aka 'Initial Margin' and 'Deposit')
The funds required as initial outlay for a trade. It is not the total amount that can be lost on the trade but the minimum amount you need to set aside to place a specific trade. NTR’s vary from product to product, please see our Market Information Sheets for specific details.
SPREAD BETTING GLOSSARY
Offer
Spreadex’s spread betting quotes are made up of two prices – one at which you can sell and one at which you can buy. The level at which you can buy is always the higher of the two prices and is called the offer.
SPREAD BETTING GLOSSARY
Orders to Open
An instruction to open a new bet should a specified price be reached. These are also known as ‘Limit Orders’.
SPREAD BETTING GLOSSARY
P&L
Abbreviation of profit and loss: how much you have made or lost.
SPREAD BETTING GLOSSARY
Pip
A ‘Percentage In Point’ is generally, though not always, the fourth decimal place, i.e. 0.0001. Traditionally, a pip was the smallest point by which a forex rate could move; although with modern advances in precision this is no longer the case.
SPREAD BETTING GLOSSARY
Point
The increment in price movement of an instrument or sports market on which you have placed your bet, that results in you making or losing a multiple of your bet size. If you buy for £10 a point on the FTSE via our UK 100 Index market and it goes up 20 points from where you traded, you make £200. If it falls 20 points you lose £200. If you buy for £10 a point on Total Points in a rugby match at 46 and in-play it rises to a 56-59 quote, you can close out for a £100 profit.
SPREAD BETTING GLOSSARY
Position
A current bet that you have running. You say you have an ‘open position’ in the FTSE if you have placed a spread bet on the FTSE index via our UK 100 Index market.
SPREAD BETTING GLOSSARY
Quarterly Bets
A type of future with periodic expiries spaced three months apart. Prices are normally quoted for the next two or three quarter months. An example of quarterly bets would be Index futures, the Wall St. December contract for example.
SPREAD BETTING GLOSSARY
QUOTE
The two-way market price that we are making for a given instrument; because it is two-way, you can buy or sell, according to whether you think the price will rise or fall.
R - S
SPREAD BETTING GLOSSARY
Realised Profit/Loss
The amount of money you have made or lost on a bet once the bet has been closed. Realised profit or loss will add to or subtract from your cash balance.
SPREAD BETTING GLOSSARY
Resistance
A term used in technical analysis indicating a price level at which analysis suggests a predominance of selling – and hence a greater likelihood that the price will fail to break through the level.
SPREAD BETTING GLOSSARY
Rollover
The procedure whereby a bet approaching expiry is closed and a bet of the same size and direction is opened for the next period, thereby prolonging the exposure to a particular market.
SPREAD BETTING GLOSSARY
Running Profit/Loss
How your open bets are currently performing: the unrealised money that you would gain or lose on your open bets if they were closed at the current market price.
SPREAD BETTING GLOSSARY
Sell
You 'sell' or short a market if you think it will fall (if you are opening a new bet). You also 'sell' to close out an existing 'buy' bet.
SPREAD BETTING GLOSSARY
Settlement (also see Expiry)
The process of a bet closing against a specified market level once the bet has gone beyond its last dealing time for financials and in sports settlement is based on the result of the event – in a 3-1 football result, Total Goals would make up at 4 and Supremacy at 2.
SPREAD BETTING GLOSSARY
Short Position
A position taken in anticipation of a falling market. To go short means to sell and you go short by selling at the ‘bid’ price.
SPREAD BETTING GLOSSARY
Slippage
The difference between the level of a Stop order and the actual price at which it was executed. Can occur during periods of higher volatility when market prices move rapidly or gap. Slippage can be prevented by placing a Guaranteed Stop (see above).
SPREAD BETTING GLOSSARY
Sports Trading Limit
Total of all money deposited, taking into account the balance of winnings/ losses from closed bets, plus winnings/ losses on open bets, plus any credit allowance.
SPREAD BETTING GLOSSARY
Spot (also see Cash Price)
The price for a currency, index, commodity or share for immediate settlement or delivery.
SPREAD BETTING GLOSSARY
Spread (aka bid/offer spread)
The difference between the buying and selling price for a particular bet and the basis on which all of our markets are offered to trade. Our spread is based on the live market price.
SPREAD BETTING GLOSSARY
Stop Order (or Stop Loss Order)
An instruction to deal if the price of the instrument in which you have an open position starts to move against you; normally placed to prevent a loss of more than a certain amount of money or to get out of a trade at a predetermined technical level.
SPREAD BETTING GLOSSARY
Support Level
A term used in technical analysis to indicate a price level at which you would expect the market to stabilise and ‘bounce’ off – can be useful for deciding to place a long trade if a market is finding a support level at a certain price. Opposite of this is resistance.
SPREAD BETTING GLOSSARY
Supremacy
A spread bet on how much one team will beat another by in sports. This can apply to how many goals team A will beat team B by in football or points team A will beat team B by in rugby and so on. This result can make up positive or negative – team A may have been quoted at 1.2-1.4 on the supremacy market, but if they are beaten 3-0 the supremacy would make up at -3 and buyers at 1.4 would lose 4.4 times their stake (-3 - 1.4 = -4.4).
T - Z
SPREAD BETTING GLOSSARY
Technical Analysis
An effort to forecast prices by analysing charts and market data, i.e. historical price trends and averages, volumes, open interest, etc.
SPREAD BETTING GLOSSARY
Trade Confirmation ID
A 6 digit alpha numeric code unique to each online trade, which is shown on screen and printable, together with various confirmatory details of the trade, immediately after the trade has been accepted. It is required in order for Spreadex to investigate any online trading queries.
SPREAD BETTING GLOSSARY
Trading Restriction Event
Any event that materially restricts trading in the underlying shares/ indices/ currencies/ sport upon which our prices are based to include, but not limited to, the suspension of a share and the imposition or any limits or special conditions, whatever the reason behind the suspension/ limitations/ special conditions/ abandonment.
SPREAD BETTING GLOSSARY
Underlying
The actual traded market or markets from which the price of a spread bet is derived.
SPREAD BETTING GLOSSARY
Unencumbered Funds
Funds held which are in excess of the sum of any deficit on the trading balance, taking into account the balance of winnings/ losses from closed bets, plus any deficit on winnings/ losses on open bets plus NTR, (excluding both any credit allowance and/ or waived NTR facilities).
SPREAD BETTING GLOSSARY
Up Bet (also see Buy)
You place an up bet on a financial market if you think it will go up in price or sports spread if you think the make-up will be higher. You also ‘buy’ to close out an existing ‘sell’ bet. When you buy you buy at the ‘ask’ price, which is the higher price of the spread quoted. In a financial trade you would place an ‘up bet’ on our UK 100 market if you think the FTSE will rise in price. In Sports, you buy if you think the result will be higher than our quote (say more points in a rugby match) and you buy at the higher of the two prices quoted (e.g. 46-49, you buy at 49).
SPREAD BETTING GLOSSARY
Working an Order
The process of having an order that has not yet been executed.
