Probably the easiest way of understanding how Spread Trading works is by following an example. Let's assume that we are interested in the price of gold in the near future. Impeo's latest quote is 723.2-723.7 and we will show how long and short positions are taken.

Example 1 (long position)

We believe that the price of gold is going up. We open a buy position in gold and put the stake at 10 SEK / point. In the case of gold each point is equivalent to a price movement of 0.1. Our opening price is thus 723.7.

Later in the day the price of gold has risen to 740.0-740.5, and we decide to get out of our position and book a profit. We thus close the position by taking an opposite position, i.e. we sell gold at 10 SEK / point at the price 740.0. The price difference in opening and closing price is (740.0-723.7)=16.3. This corresponds to 163 points and we have consequently won 1630 SEK.

Example 2 (short position)

We believe that the price of gold is going to drop. We open a sell position in gold and put the stake at 10 SEK / point. In the case of gold each point is equivalent to a price movement of 0.1. Our opening price is thus 723.2.