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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Increase in spread caps on US and Canada quarterly bets

 

From the 19 March 2014 our spread caps on US and Canada share forwards will be increasing.

There will be no change to our percentage spread rate but spread caps and roll spread caps will go up as follows:

Bet term Old spread cap New spread cap
Near quarter 12.5 100
Far quarter 13.5 116
Very far quarter 16.5 132

We are keeping our DFB percentage spread rate and cap unchanged.

See full details of our spreads on US and Canada shares.

How will this affect you when opening a new position?

Rolling Apple on a near-quarter contract

Before the increase in caps After the increase in caps
Underlying market/value Apple Inc. 54,995 / 55,000
Deal size £1
Spread rate 0.35%
Spread amount (without cap)

Buy spread = 192.5 pts

Spread rate x underlying buy price


0.35% x 55000

Spread (factoring in cap) 12.5
(Spread amount > cap, so cap applies)
100
(Spread amount > cap, so cap applies)
Interest premium

Interest premium = 89.3 pts


(SONIA + IG admin fee) x price x number of days to expiry/360

(0.15% + 0.5%) x 55,000 x 90/360


(assuming we are 90 days away from expiry)

Our near-quarter price

55,072 / 55,102

(our quote on Apple is rounded to the nearest full point)

Buy price = underlying buy price + interest premium + spread


55000 + 89.3 + 12.5

Sell price = underlying sell price + interest premium – spread


54995 + 89.3 – 12.5

54,984 / 55,189
(our quote on Apple is rounded to the nearest full point)

Buy price = underlying buy price + interest premium + spread


55000 + 89.3 + 100

Sell price = underlying sell price + interest premium – spread


54995 + 89.3 – 100

Costs

£102
(rounded to nearest £ to account for rounding in IG price)


(Spread (capped at 12.5) + interest premium) x deal size


(12.5 + 89.3) x £1

£190
(rounded to nearest £ to account for rounding in IG price)

(Spread (capped at 100) + interest premium) x deal size


(100 + 89.3) x £1

How will this affect you when rolling a position?

Rolling Facebook from the near-quarter to the far-quarter contract

Before the increase in caps After the increase in caps
Roll method A quarterly shares bet rolled over to the next quarter usually expires basis the last traded price of the relevant exchange plus or minus half the IG spread. No IG spread is charged on the opening of the new bet. There will be a fair value adjustment to the opening level to reflect an interest premium.
Open position size and direction Long £5
Roll spread rate 0.35%
Roll spread cap on near-quarter 12.5 100
Last traded price on the NASDAQ

6700

Far-quarter interest premium

11.00


((SONIA + IG admin fee) x price x number of days to expiry)/360


((0.15% + 0.5%) x 6700 x 91)/360


(Assuming there are 91 days until expiry of the far-quarter contract)

Closing spread on near-quarter (roll spread cap not factored in)

23.45


(Spread rate x last traded price on the NASDAQ Exchange)


0.35% x 6700

Closing spread on near-quarter (roll spread cap factored in)

12.5


(Spread amount > cap, so cap applies)

23.45

(Spread amount < cap, so % spread rate applies)

Closing price on near-quarter

6687.50


(Last traded price on the NASDAQ Exchange – roll spread)


6700 – 12.5 (capped)

6676.55

(Last traded price on the NASDAQ Exchange – roll spread)


6700 – 23.45 (cap not hit)

Opening price on far-quarter

6711


(Last traded price on the NASDAQ Exchange + interest premium)


6700 + 11

Cost

£117.50


(Opening price on far quarter – closing price on near quarter) x open position size


(6711 - 6687.5) x £5

£172.25

(Opening price on far quarter – closing price on near quarter) x open position size


(6711 - 6676.55) x £5