Posts from — February 2011

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

In mid-morning trade the FTSE 100 is down on the day, back below the 6000 mark.

Strength in the mining sector has so far only been able to mitigate some of the losses across a broad brush of other sectors.

Banking giant HSBC is one of the biggest losers on the day, down 4% as full year profits come in slightly below expectations, knocking the share back to its early-February levels.

What this does show is that, although some may view the slide as something of an overreaction, despite apparently continuing on the road to recovery, investors are still taking the view that bank shares are looking fully valued at current levels.

Looking ahead to the US, at the moment we are not expecting too much volatility when trading resumes, with the Dow Jones forecast to open only around 5 points lower than Friday’s close.

The situation in Libya is likely to remain one of the main driving forces behind sentiment in the coming sessions. However, with the index stabilising ahead of 12,000 towards the end of last week, we could well be in for a slight recovery over the coming days.

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 Tullow Oil?

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

• Financial Spread
• Capital Spreads
• Paddy power trader

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

Tullow Oil Spread Betting – More Details

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

Spread Betting on Tullow Oil

Should you want to invest in UK companies such as Tullow Oil then one option could be to spread trade on the Tullow Oil share price.

Looking at the Tradefair trading site, as of Friday, they were showing the Tullow Oil Rolling Daily market at 1411.6p – 1413.4p. Therefore, an investor can spread trade on the Tullow Oil shares:

• Increasing above 1413.4p, or
• Decreasing below 1411.6p

Whilst financial spread trading on UK shares you trade in £x per penny. Therefore, if you staked £6 per penny and the Tullow Oil shares move 5p then that would make a difference to your profits (or losses) of £30. £6 per penny x 5p = £30.

Rolling Daily Shares Markets

Note that this is a Rolling Daily Market and therefore in contrast with futures markets, there is no closing date. If a trade is still open when the markets close at the end of the day, it just rolls over to the next trading session.

If you do let your position roll over into the next day and are spread betting on the market to:

• Move up – then you will normally be charged a small financing fee, or
• Move down – then a small payment is normally credited to your account

To learn more please read Rolling Daily Spread Betting.

Tullow Oil Rolling Daily Shares Trading Example

If you consider the spread of 1411.6p – 1413.4p and assume that:

• you have done your market analysis, and
• it leads you to think that the Tullow Oil shares look like they will push higher than 1413.4p

then you may decide that you want to buy a spread bet at 1413.4p and risk, for the sake of argument, £3 per penny.

Therefore, you win £3 for every penny that the Tullow Oil shares go above 1413.4p. Of course, such a bet also means that you will make a loss of £3 for every penny that the Tullow Oil market decreases lower than 1413.4p.

Looking at this from another angle, if you were to ‘Buy’ a spread bet then your profits (or losses) are 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 difference in price by your stake.

With this in mind, if after a few hours the shares rose then you might want to close your trade and therefore guarantee your profits.

So if the market moved up then the spread, set by the spread trading company, might change to 1448.7p – 1450.5p. In order to close your spread bet you would sell at 1448.7p. So, with the same £3 stake this trade would make you a profit of:

Profit = (Closing Price – Opening Price) x stake
Profit = (1448.7p – 1413.4p) x £3 per penny stake
Profit = 35.3p x £3 per penny stake
Profit = £105.90 profit

Speculating on equities, whether by spread trading or otherwise, doesn’t always work out as you would have liked. In the above example, you wanted the share price to rise. Naturally, the share price might decrease.

If the Tullow Oil share price weakened, against your expectations, then you might decide to settle/close your position to limit your losses.

Should the market drop to 1381.6p – 1383.4p then you would settle your trade by selling at 1381.6p. That would mean you would lose:

Loss = (Closing Price – Opening Price) x stake
Loss = (1381.6p – 1413.4p) x £3 per penny stake
Loss = -31.8p x £3 per penny stake
Loss = -£95.40 loss

Note: Tullow Oil Rolling Daily spread betting market taken as of 25-Feb-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 LSE?

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

• Financial Spreads
• IG Index
• Paddypowertrader

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

LSE Spread Betting – More Details

For more information on trading LSE, also see LSE Spread Betting.

Spread Betting on LSE

If an investor wants to invest in firms like LSE then one possibility could be spread trading on the LSE share price.

Looking at the Financial Spreads spread betting site, as of Friday, they were showing the LSE Rolling Daily market at 886.8p – 890.2p. This means you can spread bet on the LSE shares:

• Moving higher than 890.2p, or
• Moving lower than 886.8p

Whilst financial spread trading on UK equities you trade in £x per penny. As a result, if you staked £10 per penny and the LSE share price changes by 5p then that would be a difference to your bottom line of £50. £10 per penny x 5p = £50.

Rolling Daily Shares Markets

One important thing to note is that this is a Rolling Daily Market and so unlike a normal spread betting futures market, there is no settlement date. If your trade is open at the end of the day, it just rolls over to the next trading session.

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

• Increase – then you will normally be charged a small financing fee, or
• Decrease – then you will often receive a small payment to your account

You can learn more in our feature Rolling Daily Spread Betting.

LSE Rolling Daily Equities Spread Betting Example

Now, if we consider the spread of 886.8p – 890.2p and assume that:

• you have analysed the markets, and
• it leads you to think that the LSE shares will rise higher than 890.2p

then you could choose to go long of the market at 890.2p for a stake of £5 per penny.

With such a bet you win £5 for every penny that the LSE shares increase and move above 890.2p. On the other hand, such a bet also means you will lose £5 for every penny that the LSE market falls lower than 890.2p.

Considering this from another angle, should you ‘Buy’ a spread bet then your P&L is calculated by taking the difference between the settlement price of the market and the price you bought the spread at. You then multiply that difference in price by your stake.

If after a few trading sessions the shares moved higher then you might want to close your trade so that you can secure your profit.

As an example, should the market rise, the spread, set by the spread trading firm, might move up to 908.0p – 911.4p. In order to close your spread bet you would sell at 908.0p. Therefore, with the same £5 stake your profit would be calculated as:

Profits (or losses) = (Settlement Price – Initial Price) x stake
Profits (or losses) = (908.0p – 890.2p) x £5 per penny stake
Profits (or losses) = 17.8p x £5 per penny stake
Profits (or losses) = £89.00 profit

Spread betting on equities is not always straightforward. With this example, you wanted the share price to increase. However, it could decrease.

If the LSE share price decreased, contrary to your expectations, then you might decide to close/settle your position in order to restrict your losses.

So if the spread fell to 870.2p – 873.6p you would sell back your position at 870.2p. Therefore, you would make a loss of:

Profits (or losses) = (Settlement Price – Initial Price) x stake
Profits (or losses) = (870.2p – 890.2p) x £5 per penny stake
Profits (or losses) = -20.0p x £5 per penny stake
Profits (or losses) = -£100.00 loss

Note: LSE Rolling Daily spread taken as of 25-Feb-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.

As of 10:35am trading at the LSE was still suspended. According to a statement on the LSE website:

“Trading on the LSE has yet to resume after halting earlier this morning. European shares are going well.

“The exchange said it is looking into the problem. It halted its SETS and SETSqx services, while uncrossing trades that took place in the opening auction are under investigation for possible cancellation. LSE moved its main market trading to the MillenniumIT system earlier this month.”

Financial Spreads Still Trading

Note that Financial Spreads are still trading on a variety of spread betting markets including:

Indices

• FTSE 100
• FTSE 250
• DAX
• Dow Jones
• S&P 500

Shares

• A variety of FTSE 100 equities such as Barclays, Antofagasta and Royal Dutch Shell
• German shares
• French shares

Forex

• EUR/USD
• GBP/EUR
• GBP/USD
• USD/JPY

Commodities

• UK Crude Oil
• US Crude Oil
• Gold

Financial Spreads

To trade with Financial Spreads or to apply for an account see, Financial Spreads.

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.

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

Financial Market Comments from David Jones, Chief Market Strategist, IG Index.

After an initial burst of energy in the opening auction, London trading is at a standstill as the London Stock Exchange attempts to solve a technical glitch.

While Europe’s Multilateral Trading Facilities continue to offer prices on London shares, the LSE’s problems follow a number of issues associated with its recent migration to a new trading system.

In a bad week for stock exchanges that also saw Milan’s Borsa Italia index suffer a five-hour outage, the LSE will no doubt be newly concerned about its share price.

Early signs in the FTSE do however point to troubled mining and banking sectors, with Lloyds (-5.85%) languishing at the bottom of the table despite better-than-expected profits.

Antofagasta (-1.04%) and Royal Dutch Shell ‘A’ (-0.66%) occupy the rest of the losers’ podium, as Middle-Eastern troubles rumble on.

There was more misery for the UK this morning in the form of GDP figures, as the fourth-quarter retraction was revised to 0.6%.

Despite a lack of UK shares data available to gauge reaction, the result could well mean that a rise in interest rates takes a back seat as rate-setters consider a gloomier economic outlook.

With little else to focus on in the UK at present, investors will be looking across the pond for inspiration in anticipation of this afternoon’s US GDP figures.

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.