Knowledgebase
Knowledgebase With IG Index spread betting, what does a point refer to? Posted by - NA - on 05 April 2018 04:44 PM It refers to the second decimal place. So if a stock is trading at \$15.76 the point applies to the decimal place that corresponds with the position of the “6”. In other words a one point change refers to a one cent (US stocks) or a one penny (UK stocks) change in the stock price. We make our bets based on points. So if our stock is trading at \$15.76 the spread might be: 1573 (bid) - 1579 (ask), so the total spread is 6 points (3 points each side of the last traded price 1576). We buy at the ask and sell at the bid. So if we make an up bet of £1 per point and the stock rises to \$17.00, the spread would probably be around 1697(bid) and 1703 (ask). We sell to close for an up bet, and we sell at the bid, which is now 1697. So our profit would be 1697 – 1579 = 118 points, 118 x £1 = £118 profit. Remember there are no commissions so this is pure tax-free profit under current UK legislation.