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Why the Same Trade Can End Differently

Spread • Stop Distance • Points • £1 Value

Pastel 3D illustration of a tiny clay bridge with a toll gate, safety line, and a friendly character holding a ruler

Deep Thinking Lesson

Even if you make the same trade, your result changes depending on the spread (the cost to open) and the stop distance (your safety line).

Child-Friendly Explanation

Imagine a bridge: the spread is the toll to step on, the stop distance is how far you can walk before the edge, points are your steps, and £1 per point is how much each step is worth.

Parent-Friendly Explanation

Spread and stop distance change the risk profile, not the trade idea. Worst-case loss = stop distance × £1 per point + spread cost.

Teacher-Friendly Explanation

This lesson teaches financial numeracy: proportional reasoning, cost-based decision making, and emotional regulation under risk.

Spread Options

  • No spread — zero-fee fantasy
  • 0.04 / unit — typical tight spread
  • 0.12 / unit — wide / news spread

Stop Distance Options

  • 5 points
  • 10 points
  • 25 points

Outcome Table

Open profit/loss, equity, and worst-case loss under each spread and stop distance. The table assumes a 20-unit position size, so each point is worth £20.

SpreadStopResult
No spread5-pt stop£1000 → −£100
No spread10-pt stop£1000 → −£200
No spread25-pt stop£1000 → −£500
0.04 spread5-pt stop£1000 → −£100.80
0.04 spread10-pt stop£1000 → −£200.80
0.04 spread25-pt stop£1000 → −£500.80
0.12 spread5-pt stop£1000 → −£102.40
0.12 spread10-pt stop£1000 → −£202.40
0.12 spread25-pt stop£1000 → −£502.40

Why This Matters

This lesson teaches children, parents, and teachers how risk changes even when the trade idea stays the same.