This page was created before Northern Rock was de-listed from the FTSE in March 2008.
This page is maintained as part of the SpreadBets.org.uk website archive.
As a result of Northern Rock being de-listed, readers are warned that data on this page will not be accurate.
At the time of publication the Northern Rock (March) spread betting market is trading at 87.1p - 87.9p with Capital Spreads.
As with many markets, you can bet on the future value of shares. That is to say, you can spread bet on share prices increasing or decreasing. For example, speculating on the Northern Rock shares rising in value to more than 87.9p by 18-Mar-08 (the expiry date for the UK March equities markets).
With the Northern Rock shares you trade in £X per penny, where a penny is 1p of Northern Rock share price movement. As an example, if your stake was £12 per penny and the Northern Rock shares move 5p then that would be a £60 difference to your profit/loss.
Let's say the price on a spread betting website shows a spread of 87.1p - 87.9p and let’s say:
1) You have done your analysis and think that the Northern Rock shares will go back up
2) You decide you want to 'buy' the market. You invest £5 per penny
3) The market rises. You decide to let your bet run to the expiry date
4) The price settles at 102.4p
5) Opening price = 87.9p
6) Profit/loss = (closing level - opening level) x stake
7) Profit/loss = (102.4p - 87.9p) x £5 per penny stake
8) Profit/loss = 14.5p x £5 per penny stake
9) Profit = £72.50
However investing doesn't always go to plan had the Northern Rock shares fallen further and finished at 79.1p, then you would have lost money on your investment.
5) Your bought the market at 87.9p
6) Profit/loss = (closing level - opening level) x stake
7) Profit/loss = (79.1p - 87.9p) x £5 per penny stake
8) Profit/loss = -8.8p x £5 per penny stake
9) Loss = -£44.00
Prices quoted as of 23-Nov-2007.
"Spread Bet on Northern Rock" last update by RThomas, 25-Aug-2009
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
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