Posts from — January 2011

Financial Market Comments from Will Hedden, Sales Trader, IG Index.

Mid-morning and the FTSE 100 is currently trading at 5865 (10.30 London time) as unrest in Egypt continues to dominate sentiment.

The sell-off that we saw on Friday has continued, with investors fleeing to more risk adverse assets.

As fears mount that the Suez Canal may be closed, the price of Brent crude oil has shot up to a 28-month high, just short of $100 a barrel, with US Crude not far behind at around $90.

Concerns over oil supply has dampened the share price of both BP and BG Group, however, Royal Dutch Shell is up on the day, following a Credit Suisse stock upgrade.

Unsurprisingly, the situation has hit travel firms hard, with both TUI Travel (-2.69%) and International Airlines Group (-2.30%) among today’s losers.

Right now December’s rally seems to be a distant memory and market confidence is fragile.

While the situation in Egypt has taken attention away from the Eurozone crisis, we shouldn’t forget that this is still out there.

Figures released today have showed that Eurozone inflation in January has jumped more than the ECB’s initial forecast, giving rise to speculation that the ECB will have to raise interest rates sooner than later.

Global spread betting markets are in a sombre mood this morning, and whether US markets can provide a respite from the negative sentiment remains to be seen.

Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Good Luck!

DB

The above comments do not constitute investment advice and Clean Financial accepts no responsibility for any use that may be made of them.

Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.

Where to Spread Bet on BAE Systems?

You can spread bet on BAE Systems with any of the following companies:

• Financial Spread
• IG Index
• Paddypowertrader

Although note that you can also spread bet with other Spread Betting Companies.

BAE Systems Spread Betting – More Details

For more information on trading BAE Systems, also see BAE Systems Spread Betting.

Spread Betting on BAE Systems

If you decide to speculate on firms like BAE Systems then one solution could be spread betting on the BAE Systems share price.

If an investor was to look at the paddypowertrader spread trading site, as of Friday, they were showing the BAE Systems Rolling Daily market at 352.6p – 353.3p. Therefore, you could spread trade on the BAE Systems shares:

• Moving higher than 353.3p, or
• Moving lower than 352.6p

Whilst making a spread bet on UK equities you trade in £x per penny. As a result, should you decide to risk £10 per penny and the BAE Systems share price moves 5p then that would be a difference to your profit/loss of £50. £10 per penny x 5p = £50.

Rolling Daily Shares Markets

An important aspect of this Rolling Daily Market is that there is no preset closing date for this market. Should your trade be left open at the end of the trading day, it simply keeps rolling over into the next day.

If you do roll over a position and you are spread betting that the market will:

• Go higher – then you usually pay a small overnight financing fee, or
• Go lower – then a small payment will usually be credited to your account

For more information on Rolling Daily Markets, and a fully worked example, please see Rolling Daily Spread Betting.

BAE Systems Rolling Daily Shares Spread Betting Example

So, if we think about the spread of 352.6p – 353.3p and assume:

• you have analysed the markets, and
• it leads you to feel that the BAE Systems share price looks like it will increase and move above 353.3p

then you could decide to buy a spread bet at 353.3p for a stake of, for example, £5 per penny.

So, you win £5 for every penny that the BAE Systems shares move higher than 353.3p. On the other hand, such a bet also means you will make a loss of £5 for every penny that the BAE Systems market decreases lower than 353.3p.

Looked at another way, should you ‘Buy’ a spread bet then your profit/loss is calculated by taking the difference between the final price of the market and the initial price you bought the market at. You then multiply that price difference by your stake.

If after a few sessions the share price rose then you might want to close your spread bet and therefore guarantee your profits.

Taking this a step further, if the market did go up then the spread, determined by the spread betting firm, could change to 367.4p – 368.1p. To close your position you would sell at 367.4p. Accordingly, with the same £5 stake your profit would be calculated as:

Profit / loss = (Closing Price – Opening Price) x stake
Profit / loss = (367.4p – 353.3p) x £5 per penny stake
Profit / loss = 14.1p x £5 per penny stake
Profit / loss = £70.50 profit

Trading equities, by spread trading or otherwise, is not straightforward. In the above example, you had bet that the share price would rise. Nevertheless, the share price can also go down.

If the BAE Systems stock decreased, contrary to your expectations, then you could close your position to stop any further losses.

So if the spread dropped to 337.4p – 338.1p then you would settle your position by selling at 337.4p. If so, that would mean you would lose:

Profit / loss = (Closing Price – Opening Price) x stake
Profit / loss = (337.4p – 353.3p) x £5 per penny stake
Profit / loss = -15.9p x £5 per penny stake
Profit / loss = -£79.50 loss

Note – BAE Systems Rolling Daily spread taken as of 28-Jan-11.

Spread Betting Account Offers

If you are looking to open a spread betting account then for the latest spread betting offers please see Spread Betting Offers.

For a more detailed look at the spread betting markets, spread sizes and account services offered by a range of spread betting companies also see Spread Betting Account.

Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Where to Spread Bet on Heritage Oil?

You can spread bet on Heritage Oil with any of the following companies:

• Financial Spread
• IGIndex
• Tradefair

Although note that you can also spread bet with other Spread Betting Companies.

Heritage Oil Spread Betting – More Details

For more information on trading Heritage Oil, also see Heritage Oil Spread Betting.

Spread Betting on Heritage Oil

Should an investor decide to speculate on companies like Heritage Oil then one option could be spread trading on the Heritage Oil share price.

If you were to look at the Tradefair website, as of Friday, they were showing the Heritage Oil Rolling Daily market at 333.0p – 333.9p. This means an investor could spread bet on the Heritage Oil share price:

• Increasing above 333.9p, or
• Decreasing below 333.0p

Whilst financial spread trading on FTSE 350 shares you trade in £x per penny. Therefore, if you chose to invest £20 per penny and the Heritage Oil shares move 5p then that would make a difference to your profit/loss of £100. £20 per penny x 5p = £100.

Rolling Daily Equities Markets

Be aware that this is a Rolling Daily Market which means that it does not have a set settlement date. If a trade is still open when the markets close at the end of the day, it will just roll over into the next day.

If you do roll over a trade and you are spread betting that the market will:

• Move up – then you will pay a small overnight financing fee, or
• Move down – then you will normally receive a small credit to your account

For a more detailed example see Rolling Daily Spread Betting.

Heritage Oil Rolling Daily Shares Trading Example

If you think about the spread of 333.0p – 333.9p and make the assumptions:

• you have done your market research, and
• it leads you to think that the Heritage Oil share price looks like it will move above 333.9p

then you may go long of the market at 333.9p and invest, let’s say, £10 per penny.

With such a spread bet you win £10 for every penny that the Heritage Oil shares increase and move higher than 333.9p. Of course, it also means that you will make a loss of £10 for every penny that the Heritage Oil market goes lower than 333.9p.

Looked at another way, should you ‘Buy’ a spread bet then your profit/loss is worked out by taking the difference between the closing price of the market and the price you bought the spread at. You then multiply that price difference by your stake.

As a result, if the shares started to rise you might decide to close your trade so that you can lock in your profit.

As an example, should the market rise, the spread, set by the spreads firm, might be adjusted to 343.9p – 344.8p. In order to close your position you would sell at 343.9p. Accordingly, with the same £10 stake your profit would come to:

P&L = (Final Price – Initial Price) x stake
P&L = (343.9p – 333.9p) x £10 per penny stake
P&L = 10.0p x £10 per penny stake
P&L = £100.00 profit

Trading equities, whether by spread betting or otherwise, is not easy. In this example, you wanted the share price to go up. Naturally, the share price can also go down.

If the Heritage Oil share price weakened, against your expectations, then you might decide to settle/close your spread bet in order to limit your losses.

If the market fell to 325.2p – 326.1p you would close your position by selling at 325.2p. Therefore, you would make a loss of:

P&L = (Final Price – Initial Price) x stake
P&L = (325.2p – 333.9p) x £10 per penny stake
P&L = -8.7p x £10 per penny stake
P&L = -£87.00 loss

Note – Heritage Oil Rolling Daily equities market quoted as of 28-Jan-11.

Spread Betting Account Offers

If you are looking to open a spread betting account then for the latest spread betting offers please see Spread Betting Offers.

For a more detailed look at the spread betting markets, spread sizes and account services offered by a range of spread betting companies also see Spread Betting Account.

Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Financial Market Comments from Ben Critchley, Sales Trader, IG Index.

Mid-morning and the UK 100 is sliding back toward the 5900 level.

Equity markets are struggling as the week’s final session gets underway.

Miners are the big detractors, giving back a fair slice of yesterday’s gains, but some worrying consumer confidence data has served to rattle sentiment.

David Cameron’s comments in Davos this morning have failed to stem the decline and the FTSE is now sitting dangerously close to the levels where it started the year.

In light of building risk appetite, this hardly offers much of an endorsement for UK plc. Against a backdrop of rising inflation and falling confidence, it’s becoming difficult to see where the optimism will emerge from.

Looking ahead to this afternoon, there are some key numbers out of the US that may inject a degree of bargain hunting in London.

The Q4 GDP is expected to show some healthy growth, whilst the Michigan consumer confidence reading will also be under scrutiny.

With the Dow continuing to find the 12,000 level somewhat difficult to conquer, a flurry of good news could offer the index a solid finish to the week.

Bear in mind, however, that we’ve seen the fallibility of US corporations in recent days and, with more earnings news still to come, this may help keep a lid quite firmly on the upside.

We’re currently looking at the Dow to start 5 points lower at 11,985.

Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Good Luck!

DB

The above comments do not constitute investment advice and Clean Financial accepts no responsibility for any use that may be made of them.

Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.

Financial Market Comments from Anthony Grech, Head of Research, IG Index.

Mid morning and the FTSE has recovered from early losses and looks to be heading back towards 5990.

Retail woes following a weather-hit winter trading period initially dragged London’s leading index lower this morning, while a credit-rating downgrade for Japan had banks suffering once more.

Next (-2.3%) and Dixons (-1.6%) were last seen at the bottom of the pile, while RBS (-1.2%) was the biggest loser among the banks.

Blue chips were boosted back into positive territory, however, due to a rise in the commodities spread betting markets.

Miners crowded the top of the leader board, with Fresnillo (+5.6%) and Eurasian Natural Resources (+2.6%) in particular seeing solid gains.

At the same time AstraZeneca (+1.8%) and BSkyB (+1.3%) fared well after positive earnings reports from both companies.

Ahead of the US open, investors will be looking for the Dow to retest 12,000, having closed just below this level yesterday.

It looks to be a busy day across the Atlantic, with a whole host of company earnings reports due, as well as the Chicago Fed national activity index at 1.30pm (London time) and US pending home sales at 3.00pm.

Recent economic indicators from the US have been broadly positive, with even the housing market receiving a boost with yesterday’s new home sales data. The bulls will be hoping for more of the same ahead of tomorrow’s key GDP figures.

In addition, the reporting calendar is packed with over 40 S&P 500 companies releasing quarterlies today. The markets are likely to take their cue from heavy hitters Caterpillar, Colgate & Palmolive and Proctor & Gamble. Amazon and Microsoft are also set to report after the closing bell.

Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Good Luck!

DB

The above comments do not constitute investment advice and Clean Financial accepts no responsibility for any use that may be made of them.

Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.