Financial Spread Bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Key Information Document – Bond Spread Bet
Product Description: A Bond Spread Bet is a leveraged financial derivative based on the price of a government bond such as the UK Long Gilt Spread Bet.
Objective: Allows investor to speculate on the price movement of a Bond without ever taking ownership of the bond in the underlying market.
Intended Retail Investor: Small to large scale investors who want to speculate on movements in the financial markets.
This document is put together by Trade Nation Financial UK Limited, trading as TD365.com, and provides you with key information about this investment product. It is required by law to help you understand the nature, risks, costs and potential losses in investing with these products and to help you compare against other products before you make a decision to invest.
Nature of Product
A Spread Bet is a financial product under which the parties agree to exchange the difference, in cash, between the opening price and the closing price of a trade. Spread Bets are leveraged financial products, meaning that you only have to outlay a small percentage of the notional value of a transaction.
We offer a two-way price on a few Bond Spread Bets. For instance, we may offer the UK Long Gilt Spread Bet at 124.20-124.22. If you expected the Bond to rise in price you would buy at 124.22, if you expected it to fall you would sell at 124.20. You would nominate the stake per tradeable unit, in this case it would be the amount you wished to stake for each 0.01 point movement in price. Let’s say you chose to buy a stake of £10 per unit at 124.22. This would equate to a notional value of £124,220 (12422 multiplied by £10). In order to place the trade we would require margin on your account of 50% of the notional value of the trade, which equates to £62,110.00 in this case.
In the above example, the value of your open position would increase by £10 for every 0.01 point increase in the Bond price and decrease by £10 for every 0.01 point fall in the Bond price. You can close your position at any time during our trading hours. Positions can be automatically closed if the available funds on your account fall below 50% of the required margin to have positions open. There are a number of different order types that you can place in connection to a trade to manage your risk such as stop loss, trailing stop loss and guaranteed stop loss orders.
Please make sure you fully understand the nature of spread betting and the below risks associated with trading such products before making a decision to trade. Financial spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67.3% of retail investor accounts lose money when trading CFDs with this provider.
Risks of Product
Although Spread Bets allow you to speculate on the rise and fall of global financial markets at a relatively low cost, without ever owning the underlying asset, they are considered to be risky products:
Counterparty risk – Spread Bets are “over the counter” (OTC) products, which means that they are not traded on a licensed financial market, such as a Stock Exchange. They are a contract between you and us, which means you are exposed to the risk of us as the counterparty not fulfilling our obligations to you.
Leverage risk – The leverage nature of Spread Bets means that a relatively small move in the price can cause an immediate and substantial loss to you.
Gapping risk – Financial markets can be very volatile. Gapping refers to an occurrence whereby the quoted price moves sharply from one level to the next, through an order level meaning your order may be executed at a worse price than you had hoped, for which you may incur losses beyond expectation.
Costs of Product
The principle cost or commission of trading Spread Bets is incorporated in what is known as the Spread, which is the difference between the sell and buy price. The Spread is fixed and can be viewed, along with other specific product information, in the Market Information Sheets which can be found on our website
There is no cost of holding Bond Spread Bets overnight, known as the Overnight Financing Charge, as these are Future based products.
How to complain
If you have a complaint about this product, you should contact us immediately at support@td365.com. We must give you a response within 8 weeks, but we will normally respond to complaints within 3 days or less.
Please see our terms and conditions If you are not happy with our response you may take the complaint to the Financial Ombudsman Service: http://www.financialombudsman.org.uk/
TD365.com is a trading name of Trade Nation Financial UK Limited, a company registered in England and Wales under company number 07073413, and authorised and regulated by the Financial Conduct Authority (“FCA”) with firm number 525164.
