Posts from — April 2011

Where to Spread Bet on Compass?

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

• Financial Spreads
• Inter Trader
• IG Index

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

Spread Betting on Compass

If you are going to speculate on UK listed companies like Compass then one possibility could be spread betting on the Compass share price.

If an investor was to look at the Financial Spreads spread betting site, as of Thursday, they were showing the Compass Rolling Daily market at 583.2p – 584.3p. This means you could spread trade on the Compass shares:

• Increasing higher than 584.3p, or
• Decreasing lower than 583.2p

Whilst spread betting on FTSE 350 equities you trade in £x per penny. So, if your stake was £10 per penny and the Compass share price moves 5p then that would alter your profits (or losses) by £50. £10 per penny x 5p = £50.

Rolling Daily Shares Markets

Be aware that this is a Rolling Daily Market and so it does not have a settlement date. As a result, if your trade is still open at the end of the trading day, it will stay open and roll over into the next day.

If your position is rolled over and you are speculating that the market will:

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

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

Compass Rolling Daily Equities Spread Betting Example

So, if we consider the above spread of 583.2p – 584.3p and assume:

• you have done your research, and
• you think that the Compass shares will increase and move higher than 584.3p

then you may choose to go long of the market at 584.3p and risk, let’s say, £5 per penny.

So, you win £5 for every penny that the Compass shares push above 584.3p. Conversely, however, you will lose £5 for every penny that the Compass market decreases lower than 584.3p.

Thinking of this in a slightly different way, if you were to buy a spread bet then your profit/loss is calculated by taking the difference between the settlement price of the market and the price you bought the market at. You then multiply that price difference by the stake.

Therefore, if after a few hours the share price 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 betting company, might move up to 604.8p – 605.9p. In order to close your trade you would sell at 604.8p. Therefore, with the same £5 stake your profit would be:

Profit / loss = (Closing Level – Initial Level) x stake
Profit / loss = (604.8p – 584.3p) x £5 per penny stake
Profit / loss = 20.5p x £5 per penny stake
Profit / loss = £102.50 profit

Financial spread trading is not always straightforward. In this example, you had bet that the share price would increase. However, it can also decrease.

If the Compass stock weakened, against your expectations, then you could close your position to stop any further losses.

So if the spread dropped to 566.8p – 567.9p then this means you would close your spread bet by selling at 566.8p. That would mean you would lose:

Profit / loss = (Closing Level – Initial Level) x stake
Profit / loss = (566.8p – 584.3p) x £5 per penny stake
Profit / loss = -17.5p x £5 per penny stake
Profit / loss = -£87.50 loss

Note – Compass Rolling Daily spread accurate as of 28-Apr-11.

Compass Spread Betting – More Details

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

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 the Brazil Index?

Investors are able to spread bet on the Brazil Index with these spread betting firms:

• Financial Spread
• Capital Spreads
• Inter Trader

However, you should note that this spread betting market may also be available with other Spread Betting Companies.

Brazil Index Spread Betting – More Information

For more details about speculating on the Brazil Index, also see Brazil Index Spread Betting.

How to Spread Bet on Indices – Brazil Index Futures

As with many financial markets, you are able to speculate on stock market indices, such as the Brazil Index, to go up or down.

If an investor was to look at the InterTrader spread trading website, as of Thursday, they were showing the Brazil Index June Futures market at 66470 – 66530. As a result, you could spread trade on the Brazil Index:

• Finishing above 66530, or
• Finishing below 66470

On the expiry date for this ‘June’ market, 15-Jun-11.

When making a spread bet on the Brazil Index you trade in £x per point. So, if you choose to invest £2 per point and the Brazil Index moves 50 points then that would make a difference to your profits (or losses) of £100. £2 per point x 50 points = £100.

For short term trading on stock market indices also see Indices Spread Betting.

Brazil Index Futures Trading Example

Now, if we consider the above spread of 66470 – 66530 and assume:

• you have completed your market analysis, and
• it leads you to feel that the Brazil Index will close higher than 66530 by 15-Jun-11

then you could decide that you are going to buy at 66530 and risk, for example, £1 per point.

So, you win £1 for every point that the Brazil Index increases above 66530. Nevertheless, you will make a loss of £1 for every point that the Brazil Index market goes lower than 66530.

Put another way, if you ‘Buy’ a spread bet then your profits (or losses) are found 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.

So if, on the settlement date the Brazil Index closed at 66713, then:

Profit / loss = (Final Price – Initial Price) x stake

Profit / loss = (66713 – 66530) x £1 per point stake

Profit / loss = 183 x £1 per point stake

Profit / loss = £183 profit

Speculating on indices, whether by spread betting or not, is not easy. In this example, you had bet that the index would increase. Of course, it could go down.

If the Brazil Index fell, closing lower at 66364, then you would end up making a loss.

Profit / loss = (Final Price – Initial Price) x stake

Profit / loss = (66364 – 66530) x £1 per point stake

Profit / loss = -166 x £1 per point stake

Profit / loss = -£166 loss

Note: Brazil Index June Futures spread betting market accurate as of 28-Apr-11.

Spread Betting: Accounts and Offers

For a detailed spread betting comparison, including spread sizes, the spread betting markets on offer and account services, please see Spread Betting Accounts.

In addition, for details on current spread betting offers from some of the leading financial spread betting companies, also see Spread Trading Offers.

Financial spread betting involves a high level of risk to your trading capital and can result in losses that are greater than your initial stake. Please ensure that it fits your investment objectives as it may not be suitable for all types of investor. You should only speculate with money that you can afford to lose. Before trading, please ensure you fully appreciate the risk and where appropriate seek independent advice.

In mid-morning trading, the FTSE 100 index has dipped back towards yesterday’s closing level after an initial surge at the open.

As we head towards another long weekend, it’s no surprise that trading levels are low.

Miners boosted the FTSE this morning, reversing several negative days as a weakened US Dollar boosted sales of copper.

Standard Life sat at the top of the table after reporting a 25% jump in revenue, closely followed by GlaxoSmithKline which saw profits rise by 14% in the first quarter.

Whitbread lost a hefty 6% as the rise in coffee prices took its toll and difficult economic conditions started to affect consumer confidence.

Global indices spread betting markets reacted relatively well to the reassurances of the latest Federal Reserve meeting that it would continue to support the stuttering economy with a solid stimulus programme.

In fact it pledged to complete its scheduled $600bn (£363bn) second round of purchases by the end of June.

The Fed cut its economic growth forecast for the year, however, citing lower defence spending, lower exports, a weaker construction sector and bad weather in the first quarter as the cause.

As the official US GDP data for this quarter will be released at 1.30pm (London time) investors will no doubt be watching closely to find out the damage.

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 Yusuf Heusen, Senior Sales Trader, IG Index.

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.

In mid morning trading blue chips in London have eased back, with little reaction to the latest GDP release.

FTSE shares had been weak ahead of the first quarter’s preliminary GDP data, with Associated British Foods and Barclays two of London’s biggest losers.

ABF expects to feel the pinch from higher commodity prices, specifically sugar, and tighter-than-expected profit margins from its discount clothing retailer Primark.

This news has really knocked the stuffing out of the one-month recovery for the share price and investors, concerned about the lack of immediate upside in the current economic climate, may end up giving it a wide berth for now.

The main event for the UK spread betting markets was that GDP release, which came in at 0.5% as expected.

As usual, stocks barely flinched on the news. The big early mover however was the Sterling – Dollar forex rate, jumping around 80 points and clawing back ground lost in early morning trading.

Although the GDP figure comes as no surprise, it does mean that because we had a 0.5% contraction in the previous quarter, the UK has seen no growth for six months.

Coupled with easing inflation, this may mean that expectations for a rise in rates from the Bank of England are pushed further back again.

Looking ahead to the US open at the moment we expect the Dow Jones to start off around 10 points lower.

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 David Jones, Chief Market Strategist, IG Index.

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.

In mid-morning trade the FTSE has made a positive start to the week.

With another short week for the UK market the FTSE has got off to a good start, up around 25 points so far.

Snappily named International Consolidated Airlines Group is leading the UK shares with gains of around 3%.

Burberry is also in favour, continuing to attract buyers following last week’s strong update.

The share price of the luxury goods brand has set fresh all-time highs once more and seems to be attracting both the longer term investor and momentum trader alike, targeting a possible move through 1300p.

Looking ahead to the US, after a slight dip yesterday it looks as if the Dow Jones is set for a stronger start today, currently forecast up around 30 points.

Earnings updates from Ford before the open and Amazon after the close are likely to drive sentiment before attention switches to Wednesday’s GDP numbers and latest Fed interest-rate decision.

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.

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.