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Model 30 Portfolio Size and Exposure
| Net exposure ratio | Can vary from 100% net long to 100% net short |
| Gross exposure ratio | Should not exceed 500% of funds' value (sum of long and short positions should not be greater than five times funds' value) |
The following guidelines on portfolio size and exposure are designed to minimize risk and optimise performance.
Spread Betting Account
| Recommended funds | £10,000 |
| Exposure on stocks | Bet x price (in pence). Example: to invest £3,000 in a stock priced 100p, the bet is £30 (£30 x 100) |
| Maximum exposure on short positions in stocks | £1,000 (10% of funds' value). For example a short on Kelda (price 1000p, bet £1) |
| Maximum exposure on long positions in stocks | £3,000 (30% of funds' value). For example a long on Astrazeneca (price 3000p, bet £1) |
| Recommended funds | £20,000 |
| Exposure on stocks | Number of contracts x price (in pound). Example: to invest £3,000 in a stock priced 100p, the number of contracts is 3,000 (3,000 x £1) |
| Maximum exposure on short positions in stocks | £2,000 (10% of funds' value). For example a short on Astrazeneca (price £30, number of contracts 67) |
| Maximum exposure on long positions in stocks | £6,000 (30% of funds' value). For example a long on Astrazeneca (price £30, number of contracts 200) |
The above guidelines are strongly recommended in order to achieve best results. However, some investors may want to take more risk in which case they could trade the Model 30 Portfolio with less funds than the recommended amount. For example an investor spread betting with £5,000 of funds could take a short on Astrazeneca. The minimum bet is £1 and the exposure would be £3,000. This represents 60% of funds' value (£3,000 divided by £5,000) which is far in excess of the recommended 10% of funds' value.
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