Posts from — May 2011

In mid morning trade, shares have made a strong start to the week, with the FTSE probing the 6000 mark.

News from the EU that Greek debt will not be restructured, and the aid package should be agreed by the end of June, has lifted a major shadow from markets this morning, resulting in a strong start for blue chips in London.

Top of the table so far is plumbing supplies business Wolseley, with some early buying ahead of the company’s interim management statement on Wednesday.

It has been a flat year for the shares and, as a significant portion of their business is affected by the health of the UK housing market, it is difficult to expect anything too positive tomorrow.

Nevertheless, after slipping back towards the lows for the year investors are clearly seeing value here today.

Looking ahead to the US open, at the moment we are expecting the Dow Jones to start trading this afternoon around 110 points higher than Friday’s close.

With such a sharp open, and little in the way of major economic news, we may end up with an unexciting session afterwards, but the progress made on Greece is clearly lifting the mood of investors today.

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 Anthony Grech, Head of Research, 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.

Where to Spread Bet on Weir Group?

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

• Financial Spread
• Tradefair
• Capital Spreads

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

Spread Betting on Weir Group

If you want to speculate on companies such as Weir Group then one option is to spread trade on the Weir Group share price.

If an investor was to look at the InterTrader spread trading website, as of Friday, they were showing the Weir Group Rolling Daily market at 1996.0p – 2000.0p. As a result, you can spread bet on the Weir Group shares:

• Going above 2000.0p, or
• Going below 1996.0p

Whilst spread trading on FTSE 350 equities you trade in £x per penny. As a result, if you choose to risk £4 per penny and the Weir Group share price changes by 5p then that would alter your profits (or losses) by £20. £4 per penny x 5p = £20.

Rolling Daily Equities Markets

One important thing to note is that this is a Rolling Daily Market and so there is no preset closing date for this market. If your trade is open at the end of the day, it will simply roll over to the next session.

If you allow your position to roll over and are spread betting on the market to:

• Rise – then you normally pay a small overnight financing fee, or
• Fall – then a small payment will usually be credited to your account

To find out more about Rolling Daily Markets read our feature Rolling Daily Spread Betting.

Weir Group Rolling Daily Shares Spread Trading Example

Now, if you think about the spread of 1996.0p – 2000.0p and make the assumptions that:

• you have done your analysis, and
• you think that the Weir Group share price is likely to move higher than 2000.0p

then you could go long of the market at 2000.0p for a stake of £2 per penny.

Therefore, you win £2 for every penny that the Weir Group shares push above 2000.0p. Of course, it also means that you will make a loss of £2 for every penny that the Weir Group market moves below 2000.0p.

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

Therefore, if after a few hours the share price moved higher then you might want to close your position to lock in your profit.

As an example, should the market rise, the spread could change to 2070.0p – 2074.0p. To close your trade you would sell at 2070.0p. Therefore, with the same £2 stake your profit would be calculated as:

Your P&L = (Settlement Price – Opening Price) x stake
Your P&L = (2070.0p – 2000.0p) x £2 per penny stake
Your P&L = 70.0p x £2 per penny stake
Your P&L = £140.00 profit

Speculating on equities, by spread betting or otherwise, can go against you. In this case, you had bet that the share price would rise. Naturally, it can also fall.

If the Weir Group shares began to fall then you might decide to settle/close your spread bet in order to limit your losses.

Should the spread pull back to 1937.0p – 1941.0p then you would settle your trade by selling at 1937.0p. That would mean you would make a loss of:

Your P&L = (Settlement Price – Opening Price) x stake
Your P&L = (1937.0p – 2000.0p) x £2 per penny stake
Your P&L = -63.0p x £2 per penny stake
Your P&L = -£126.00 loss

Note: Weir Group Rolling Daily spread correct as of 27-May-11.

Weir Group Spread Betting – More Details

For more information on trading Weir Group, also see Weir Group 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 Capita?

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

• Financial Spread
• Inter Trader
• IGIndex

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

Spread Betting on Capita

Should an investor decide to speculate on UK companies like Capita then one possibility is to spread bet on the Capita share price.

If an investor was to look at the Inter Trader spread betting website, as of Friday, they were showing the Capita Rolling Daily market at 723.1p – 725.4p. This means an investor could spread bet on the Capita shares:

• Increasing higher than 725.4p, or
• Decreasing lower than 723.1p

When making a spread bet on UK shares you trade in £x per penny. As a result, if you choose to risk £10 per penny and the Capita share price moves 5p then that would make a difference to your profit/loss of £50. £10 per penny x 5p = £50.

Rolling Daily Shares Markets

You should note that this is a Rolling Daily Market which means that it does not have a settlement date. You do not have to close your trade, should it still be open at the end of the trading day, it simply rolls over to the next session.

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

• Go higher – then you will often be charged a small financing fee, or
• Go lower – then you will usually receive a small credit to your account

For a more detailed breakdown of Rolling Daily Markets please read our article Rolling Daily Spread Betting.

Capita Rolling Daily Equities Trading Example

Now, if we consider the spread of 723.1p – 725.4p and assume that:

• you have analysed the equities market, and
• it leads you to feel that the Capita share price is likely to increase and go higher than 725.4p

then you may decide that you want to go long of the market at 725.4p for a stake of £5 per penny.

With such a bet you win £5 for every penny that the Capita shares increase and move above 725.4p. Of course, you will make a loss of £5 for every penny that the Capita market falls below 725.4p.

Thinking of this in a slightly different way, if you were to ‘Buy’ a spread bet then your P&L is calculated by taking the difference between the closing price of the market and the price you bought the spread at. You then multiply that difference in price by your stake.

Therefore, if after a few days the stock rose then you might want to close your position and therefore guarantee your profits.

As an example, should the market rise, the spread, determined by the spread betting company, could be adjusted to 745.3p – 747.6p. You would close your spread bet by selling at 745.3p. So, with the same £5 stake you would calculate your profit as:

Profits (or losses) = (Final Level – Initial Level) x stake
Profits (or losses) = (745.3p – 725.4p) x £5 per penny stake
Profits (or losses) = 19.9p x £5 per penny stake
Profits (or losses) = £99.50 profit

Speculating on equities can work against you. In this case, you wanted the share price to increase. However, it might decrease.

If the Capita share price had fallen then you might choose to close your position to stop any further losses.

So if the spread pulled back to 703.6p – 705.9p then you would sell back your position at 703.6p. As a result, your loss would be:

Profits (or losses) = (Final Level – Initial Level) x stake
Profits (or losses) = (703.6p – 725.4p) x £5 per penny stake
Profits (or losses) = -21.8p x £5 per penny stake
Profits (or losses) = -£109.00 loss

Note: Capita Rolling Daily spread betting price accurate as of 27-May-11.

Capita Spread Betting – More Details

For more information on trading Capita, also see Capita 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 Cable and Wireless Communications?

You can spread bet on Cable and Wireless Communications with any of the following companies:

• Financial Spread
• InterTrader
• IG Index

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

Spread Betting on Cable and Wireless Communications

Should you want to invest in UK listed companies such as Cable and Wireless Communications then one option could be to place a spread bet on the Cable and Wireless Communications share price.

If an investor was to look at the capital spreads spread betting website, as of Friday, they were showing the Cable and Wireless Communications Rolling Daily market at 43.9p – 44.1p. This means you can spread bet on the Cable and Wireless Communications share price:

• Rising higher than 44.1p, or
• Falling lower than 43.9p

Whilst spread trading on UK shares you trade in £x per penny. As a result, if you decided to invest £15 per penny and the Cable and Wireless Communications shares move 5p then that would make a difference to your profits (or losses) of £75. £15 per penny x 5p = £75.

Rolling Daily Shares Markets

You should note that this is a Rolling Daily Market which means that there is no predetermined closing date for this market. You do not have to close your trade, should it still be open at the end of the trading day, it simply rolls over to the next trading day.

Should your bet roll over, if you are speculating that the market will:

• Go up – then you will be charged a small overnight financing fee, or
• Go down – then you will often receive a small payment to your account

For a worked example please see Rolling Daily Spread Betting.

Cable and Wireless Communications Rolling Daily Shares Spread Trading Example

If you consider the above spread of 43.9p – 44.1p and assume:

• you have analysed the equities market, and
• it leads you to feel that the Cable and Wireless Communications share price is likely to go higher than 44.1p

then you might decide to go long of the market at 44.1p and risk £20 per penny.

With such a spread bet you make a profit of £20 for every penny that the Cable and Wireless Communications shares move above 44.1p. Nevertheless, you will lose £20 for every penny that the Cable and Wireless Communications market falls lower than 44.1p.

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

If after a few days the shares rose then you might consider closing your position so that you can secure your profit.

As an example, should the market rise, the spread, determined by the spread betting company, might change to 47.8p – 48.0p. To close your position you would sell at 47.8p. As a result, with the same £20 stake this trade would result in a profit of:

P&L = (Closing Level – Initial Level) x stake
P&L = (47.8p – 44.1p) x £20 per penny stake
P&L = 3.7p x £20 per penny stake
P&L = £74.00 profit

Trading shares, by spread betting or otherwise, may not go to plan. In this case, you wanted the share price to rise. Nevertheless, the share price can also go down.

If the Cable and Wireless Communications stock weakened, against your expectations, then you might choose to close your trade to stop any further losses.

So if the spread pulled back to 39.7p – 39.9p then this means you would settle your position by selling at 39.7p. If so, your loss would be calculated as:

P&L = (Closing Level – Initial Level) x stake
P&L = (39.7p – 44.1p) x £20 per penny stake
P&L = -4.4p x £20 per penny stake
P&L = -£88.00 loss

Note: Cable and Wireless Communications Rolling Daily spread betting market correct as of 27-May-11.

Cable and Wireless Communications Spread Betting – More Details

For more information on trading Cable and Wireless Communications, also see Cable and Wireless Communications 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.

In mid-morning trade shares in London have made a solid start.

After a quiet day on Thursday, there’s more conviction about investors today and this has pushed the FTSE 100 out to its best levels for the week.

Analysts’ upgrades for the banking sector have lifted the likes of Lloyds and RBS by a couple of percent.

This will be of particular relief for Lloyds shareholders because the share price has suffered a fairly relentless decline in the past six months.

Looking ahead to the US open, at the moment we are expecting the Dow to start broadly unchanged from last night’s close.

Shares on Wall Street staged a strong turnaround on Thursday but the 12,450 area on the Dow is still capping any rallies for now.

It remains to be seen whether this level can be finally cracked this afternoon, leaving us with a strong finish into the weekend.

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.