Key thing in spread betting
Posted on 01/17/2012 03:12 pm by adminThe key thing in financial spread betting with parity is when the market is unchanged on the day and you’re looking at say a 60/60 Tunnel, it’s got to move 60 points in either direction to break the Tunnel so that’s the maximum it can be. If it’s up 20 points, then it’s got to move down 80 but up 40 for example. If it moves down, then you’re still 60 points away. The price in financial spread betting is liable to be lower as the Tunnel nears the extremes like plus or minus 60 in this example.
The power of parity is a two-way thing. Firstly, at financial spread betting near parity or at parity the Tunnel price is higher so we’re going to sell it and you get a better price.