These accounts offer you the thrills and excitement of spread
betting with the benefit of a safety net. All bets are
subject to a maximum 'stop-loss', this is a specific level
at which certain trades are closed to prevent open-ended losses
or profits. This means that when trading on a Shield account
you have the knowledge of the maximum you can lose on each
bet. Lets take the following example:
Stop Loss Example: New Zealand v England - 1st Test (Christchurch
- March 2002)
At 106 for 5 in their second innings, England were precariously
positioned. Sporting Index predicted that England would score
30 or so runs before the next wicket fell.…. and as a
result their Fall Of Next Wicket quote was 135-140:
Market
So
Far
Quote
Stake
Action
Fall
of Next Wicket
135
-
140
SELL
BUY
Now say you were expecting on of England's spectacular collapses
and you SOLD £2 per points at 135. Graham Thorpe and
Andy Flintoff surprisingly stunned the Christchurch crowd
as they smashed shots all around the ground on their way to
a 6th wicket partnership of 281 … Flintoff finally left
the crease with England on 387. With a credit account you
would have lost (387 - 135) x £2 = £504.
Now say you were expecting one of England's spectacular collapses
and you SOLD £2 per points at 135. Graham Thorpe and
Andy Flintoff surprisingly stunned the Christchurch crowd
as they smashed shots all around the ground on their way to
a 6th wicket partnership of 281… Flintoff finally left
the crease with England on 387. With a credit account you
would have lost £504. However, if you had BOUGHT £2
per point at 140, with a credit account you would have won
(387 - 140) x £2 = £494.
Stop Loss.
The stop win/loss for this market is 100 points. Therefore
with a limited exposure account you would have minimised your
potential losses and winnings to 100 x £2 = £200.
Other points:
The Sporting Index Shield Account also allows you to operate
your account directly from your bank account, meaning the
balance is settled on a weekly basis via your debit card.
2. Credit Account (Classic Account)
With a Credit Account experience the thrill of unlimited
gains / losses of spread betting.
The key difference between spread betting and fixed-odds
betting. Profits, and losses, are made in proportion to whatever
unit stake you choose, but the stake is not the limit of your
financial risk. With a £10 bet with a High Street bookmaker,
that £10 is all that can be lost. A £10 per run
bet on cricket can win, or lose, many times more than the
£10 unit stake.
So remember, you have no safety net with a credit account.
Be careful and don't gamble with money you can't afford to
loose.