LONG TERM TRADE
Buying Vodafone
Vodafone is trading at 116 - 116.5 You think that the price of Vodafone is going to rise so you buy at 116.5 at £10.00 per point The price of Vodafone rises to 120 - 120.5 so you sell at 120. In this instance you would have made a profit of £35.00 as Vodafone moved 3.5 points = £10.00 x 3.5 = £35.00.
Conversely
Vodafone's price drops from 116-116.5 to 113-113.5. You sell at 113 to close your position. In this instance you make a loss of £35.00 as the price moved 3.5 points against you. £10.00 x 3.50 = £35.00.
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