In financial spread betting, understanding how profits and losses are calculated is critical for both traders and brokers. Unlike CFDs and Forex trading, spread betting uses a point-based profit and loss model, which requires careful platform-level design to ensure accuracy, transparency, and risk management. Fintechee’s platform provides robust infrastructure to handle these calculations reliably.
Point-Based Profit and Loss Logic
The core of spread betting is its point-based PnL system. Traders select a stake per point, and the profit or loss is calculated based on the number of points the market moves in their favor or against them. For example:
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Stake per point: $5
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Market movement: 20 points up
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Profit: 20 × $5 = $100
This system makes it easy for traders to understand potential exposure and for brokers to calculate risk in real time.
Stake Per Point vs Lot-Based Trading
Unlike CFD trading, which is lot-based, spread betting calculates trades using stake per point:
| Feature | Spread Betting | CFD Trading |
|---|---|---|
| PnL Calculation | Points × Stake per point | Lots × Contract size × Price change |
| Position Size | Flexible, based on point stake | Fixed lot sizes |
| Risk Clarity | High – traders know exposure per point | Dependent on lot and price movement |
This difference requires the trading platform to support both types of logic if offering multiple leveraged products.
Margin and Leverage Handling
Margin and leverage are fundamental to spread betting. Fintechee’s platform supports:
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Dynamic margin calculation based on stake per point and market volatility
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Leverage settings adjustable per instrument or client type
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Real-time margin monitoring to prevent overexposure
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Automatic margin calls and forced liquidations when thresholds are breached
This ensures both broker and client positions are maintained safely and transparently.
Stop Loss and Take Profit Behavior
Even with point-based trading, risk management tools such as stop loss and take profit orders are essential. Fintechee’s platform:
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Converts stop-loss and take-profit levels into points relative to entry price
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Executes orders in real time to protect client positions
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Integrates seamlessly with margin and PnL calculations
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Ensures that client risk is capped according to their preferences and regulatory requirements
How Fintechee Models These Calculations Accurately
Fintechee’s backend is designed to accurately handle spread betting calculations across multiple instruments:
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Modular PnL calculation engine for point-based trading
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Integration with real-time pricing feeds for precise market data
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Risk and margin modules work together to maintain exposure control
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Supports multi-asset accounts while keeping PnL calculations isolated per product
This architecture allows brokers to offer spread betting confidently, knowing the calculations are precise, transparent, and compliant with regulatory standards.