Posts from — January 2008
A new year, the markets are in spot of bother and the odd bank could be nationalised…so how to protect your investments.
One of the major benefits of spread betting is selling (betting against) companies, sectors, FX, commodities and more. However another benefit is the Stop Loss. A control used to help restrict your losses on markets that move against you. And that brings us to tip 67.
67. It’s often tempting to re-enter a trade after it hits your Stop Loss. You’ve already lost once on the trade. That should act as a warning. Don’t repeat the same mistake on the same market. Do your research on the market just like you would on any new bet and then only re-enter the market if it looks like a good trade. Query why you are re-entering a market you’ve already lost on. A losing trade generally means that you’re wrong
68. Research and Analysis. Continuing on from earlier spread betting tips…if you’re losing examine your Trading Spreadsheet and check your notes. Why are all those bets losing you money? Are there one or two pieces of research missing? If you had done the leg work would that have stopped you trading on most of your poor trades?
69. Similar to the above, why are you losing? Look at your Trading Spreadsheet and check your notes. Why are all those bets losing you money? Be honest and ask yourself ‘were those informed trading decisions or was I taking a punt?’ If you’re taking a punt, expect to lose money. You need to do more research in order to minimise the gambling element
70. Why are you losing cash when you’ve got a good number of both winning and losing bets? Look at your Trading Spreadsheet and check your notes. Is it that your winning trades are only winning you a little money and not covering your losses? That would suggest you are taking too many risks for too little return and/or that you are closing your winning bets too early and/or you’re not closing your losing bets early enough
71. I’ve just wasted a bunch of cash on losing bets. Not all losing trades are wasted. Work out what you’ve just paid for ie you paid for all your losses. Make sure you can take some useful information from those losses. Do your analysis. Update your plan. Remove as many common errors as possible from future trades. If you ignore your losing bets, it’s a fair bet that, there’ll be plenty more of them. It’s the old ‘Learn from your mistakes’, they’re not cheap!
More spread betting tips soon.
As promised we’ve not started creating individual pages for each of the FTSE 250 companies.
We’re well into the FTSE 100 and the FTSE 250 certainly isn’t the quickest of jobs…
Why bother? Well for each FTSE 250 company we try to answer the popular spread questions for that company:
Q) Where can I Spread Bet on 250 Company X?
Q) Where can I Trade for Free on Company X?
Q) How to Spread Bet on FTSE 250 Company X?
Q) Where can I find Free Live Prices on Company X?
Q) Where can I find Free FTSE 250 Company Charts?
Plus we also give you a specific spread betting example for each company.
You can find the current FTSE 250 company index here.
A belated Happy New Year!
As promised on this blog we will try to mix things up and today we’ll have a quick look at one of the so called recession proof industries. Cigarettes are often seen as ‘relatively recession proof’ and therefore during ‘interesting times’ traders often have a quick look at the Tobacco companies to see if there’s any value there.
Today we’ll have a quick look at buying Imperial Tobacco shares.
How to Spread Bet on Imperial Tobacco Shares?
As with many financial markets, you can bet on the future price of shares, like Imperial Tobacco shares, rising or falling.
As it stands, the Imperial Tobacco (June) market is 2612.0p – 2624.4p with Financial Spreads. This ‘June’ market expires on 17-Jun-08.
Therefore you can spread trade on Imperial Tobacco shares settling:
- Higher than 2624.4p, or
- Lower than 2612.0p
By the expiry date for this market, 17-Jun-08.With UK equities spread trading, you trade in £x per penny, where a penny is 1p of Imperial Tobacco share price movement.
Eg if your stake was £4 per penny and the Imperial Tobacco shares move 20p then that would be a £80 difference to your profits.
Spread Betting Example
So taking the above spread of 2612.0p – 2624.4p let’s say you have done your market analysis and think that the Imperial Tobacco shares will be higher than 2624.4p by on-Jun-08.
Therefore you buy at 2624.4p for a stake of, let’s say, £2 per penny.
And so let’s say that by the settlement date the shares close at 2683p.
If so, your profit / loss is worked out by taking the difference between the settlement price of 2683p and the value you bought at, ie 2624.4p and then multiplying that by the stake per penny of share price movement.
Profit and loss = (2683.0p – 2624.4p) x £2 per penny stake.
Profit and loss = 58.6p x £2 per penny.
= £117.20 profit.
Nevertheless if the market didn’t move as predicted and had Imperial Tobacco shares gone against you and finished at a lower than expected level of 2498.0p, you would have made a loss on this spread bet.
Profit and loss = (2498.0p – 2624.4p) x £2 per penny stake.
Profit and loss = -126.4p x £2 per penny stake.
= -£252.80 loss.
That’s it for now.