Posts from — June 2011

In mid-morning trade the FTSE is powering ahead, although the 5,900 level remains difficult to break.

The spread betting markets remain in a broadly upbeat mood over yesterday’s successful vote on austerity measures in Greece.

The FTSE 100 has added 250 points already this week, demonstrating a conviction in Athens’ ability to negotiate a way out of its woes without causing any massive fall-out on a global basis.

In terms of specific equities, Lloyds Banking Group is out in front as the market shows faith in its aggressive staff cuts, even if this is another modest blow to the UK economy in general. RBS and Barclays are also finding support.

There are very few stocks trading in the red, although ARM Holdings continues to struggle after analyst comments yesterday.

Looking into the afternoon, Wall Street is also eyeing further gains. The S&P 500 is back above 1,300, giving traders psychological support, and the Dow is currently looking to open another 50 points up from last night’s tally.

Although there are suggestions that the next round of voting in Athens could run into difficulty, markets seem unperturbed by the event.

A speech on QE due from the Fed’s Bullard later this afternoon may offer the markets some direction, on the basis that today marks the end of the scheme.

Otherwise, so long as there are no surprises, the party mood looks set to carry on for some time yet.

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.

The FTSE has posted another run of solid gains as markets await news from Greece.

With all eyes on Athens, but with no definitive time for the vote to actually come in, indices traders have been riding the recent wave of confidence on the broad-based assumption that the austerity vote will be passed.

Quite what this actually means, however, when there are clear signs that the population won’t buy into the measures required remains to be seen.

As a result, this rally looks awfully fragile and potentially just increasing the size of any resulting sell-off that we will presumably witness at some point.

With little else on the economic calendar, affairs in Greece really are dominating what is otherwise a relatively quiet market.

Traders in London are, at least for the time being, looking at a sea of blue on their screens.

Literally a handful of stocks are in the red with broker ratings weighing here. However, with gold back above $1500/oz and oil stabilising, the commodity-heavyweights are boosting the index as a whole, lining up Wall Street for a positive start to the session too.

At present we’re forecasting the Dow to add another 40 points when trade gets underway on Wall Street.

Nevertheless, this comes with the significant caveat that there’s still the verdict due from Athens, and many may be looking to book quick profits as soon as the word is out.

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 trade it’s another positive start for London shares, with no surprises from UK GDP data.

The FTSE 100 has continued yesterday’s momentum and UK GDP has been confirmed at 0.5% for the first quarter of 2011.

Takeover speculation has pushed Severn Trent and United Utilities to the top of the blue-chip gainers so far, following yesterday’s bid news for Northumbrian Water.

Greece is still the main concern for markets. Despite today’s general strike there still seems to be an optimistic tone that the austerity measures will be passed tomorrow and the bailout can move to the next stage.

There is still a lot that could go wrong, but with the way markets have performed over the last couple of days, some are hoping that finally sentiment has turned a corner and it is time for a recovery.

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

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 100 has made a positive start to another week set to be dominated by European debt concerns.

Some investors will be pleasantly surprised to see blue chips trading up on the day given the backdrop of Greek debt likely to affect sentiment.

The spread betting markets have started off on a strong footing despite the upcoming vote on austerity measures, helped by investment bank upgrades for the mining sector.

There are no real stand-out winners or losers within FTSE 100 shares with gains and losses confined to less than a couple of percent at both ends of the table.

For now traders seem to be happy to view the index as offering value when it drops below 5700.

Looking ahead to the start of trading in the USA, we are currently expecting the Dow Jones to start around 50 points higher than Friday’s close.

US personal spending and income data is due for release later this afternoon may have a slight impact on market movements there, but should be little doubt that developments in Greece are still the only events that matter at the moment.

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.

Where to Spread Bet on Whitbread?

You can spread bet on Whitbread 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 Whitbread

Should you want to speculate on firms such as Whitbread then one solution could be to spread trade on the Whitbread share price.

Looking at the Tradefair spread betting site, as of Friday, they were showing the Whitbread Rolling Daily market at 1585.2p – 1587.8p. Therefore, you can spread trade on the Whitbread share price:

• Moving above 1587.8p, or
• Moving below 1585.2p

Whilst spread trading on UK shares you trade in £x per penny. Therefore, if you choose to risk £4 per penny and the Whitbread share price moves 5p then that would be a difference to your profits (or losses) of £20. £4 per penny x 5p = £20.

Rolling Daily Shares Markets

You should note that this is a ‘Rolling Daily Market’, therefore there is no set closing date for this market. If a trade is still open when the markets close at the end of the day, it will just roll over into the next trading session.

If a bet is rolled over and you are speculating on the market to:

• Move up – then you will pay a small overnight financing fee, or
• Move down – then a small payment is usually credited to your account

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

Whitbread Rolling Daily Equities Spread Betting Example

So, if we consider the above spread of 1585.2p – 1587.8p and make the assumptions:

• you have analysed the equities market, and
• it leads you to feel that the Whitbread shares are likely to increase and move above 1587.8p

then you might buy at 1587.8p and invest £2 per penny.

So, you win £2 for every penny that the Whitbread shares move higher than 1587.8p. Of course, you will lose £2 for every penny that the Whitbread market moves below 1587.8p.

Put 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 price you bought the market at. You then multiply that price difference by the stake.

Therefore, if after a few days the share price started to increase then you might think about closing your trade so that you can secure your profit.

So if the market rose then the spread, determined by the spread betting firm, could change to 1639.4p – 1642.0p. To close your trade you would sell at 1639.4p. As a result, with the same £2 stake:

Profit / loss = (Settlement Level – Initial Level) x stake
Profit / loss = (1639.4p – 1587.8p) x £2 per penny stake
Profit / loss = 51.6p x £2 per penny stake
Profit / loss = £103.20 profit

Financial spread betting can work against you. With this example, you had bet that the share price would rise. Of course, the share price could fall.

If the Whitbread shares began to fall then you might decide to settle/close your trade to limit your losses.

Should the market pull back to 1529.8p – 1532.4p you would close your position by selling at 1529.8p. So your loss would be calculated as:

Profit / loss = (Settlement Level – Initial Level) x stake
Profit / loss = (1529.8p – 1587.8p) x £2 per penny stake
Profit / loss = -58.0p x £2 per penny stake
Profit / loss = -£116.00 loss

Note – Whitbread Rolling Daily spread betting price taken as of 24-Jun-11.

Whitbread Spread Betting – More Details

For more information on trading Whitbread, also see Whitbread 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.