Posts from — November 2011

FTSE retakes 5,300 as bears lose momentum.

The London index is reversing some of its earlier losses as Wednesday’s trade gets established. Banks may be weighing after that raft of downgrades from S&P yesterday but it’s the resource stocks that are pulling the index as a whole lower as traders look to book some of the gains the sector saw earlier in the week.

The European saga continues to rumble on and although the run of sovereign debt auctions takes something of a break today, the situation remains very much at the top of the agenda for financial spread betting markets across the globe.

It’s been a relatively quiet day for economic news so far, although the surprise fall in German unemployment is worth noting. It does however serve to underline the extent of the imbalance that has been created across the Eurozone so any failure to get overly excited about the number can perhaps be excused.

As the day progresses, spread trading investors’ attention will doubtless shift to the employment numbers that are due from the US. Both the ADP and Challenger readings are will be released, acting as always as curtain-raisers to Friday’s main event of the non-farms.

With the longer term outlook for the US economy becoming increasingly bullish, expectations are for a robust set of numbers to be seen in the days ahead. Wall Street futures may have picked up in the last few hours pointing toward the DOW starting just 30 points or so lower but any shocks in the data could easily see another reversal here.

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 Chris Beauchamp, Market Analyst, 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.

After the storm comes the calm. The FTSE opened slightly lower this morning, down around 30 points, as traders and indices spread betting investors paused for breath following yesterday’s strong rally.

With little in the way of corporate news for spread betting markets to digest, the focus is on the chancellor’s autumn statement and on a meeting of Eurozone finance ministers this afternoon.

Much of the content of George Osborne’s speech has been widely trailed, but it will still be uncomfortable for the government to have to publicly admit that it will fall short of its targets.

Yesterday’s rally was given impetus by hopes that the Eurozone was lurching towards a deal, and now we hope that ministers will build on this during the afternoon in order to sustain the rally beyond a mere dead cat bounce.

In the US this afternoon we will get some important consumer confidence data at 3pm (London time), with the index expected to improve. The shopping frenzy on Friday reassured markets that the US consumer was still capable of splashing the cash so a strong reading here will provide an additional foundation for the current rally.

At present the Dow is expected to open around 100 points higher, a significantly stronger start than the one we saw in London this morning.

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 Chris Beauchamp, Market Analyst, 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 is around 2% higher from Friday’s close.

We are seeing an unusually strong start to the week by recent standards for the UK share spread betting market. Once again it is expectations surrounding Europe driving the rally, although weekend reports that the IMF are discussing a bailout for Italy have been strongly denied by the organisation.

However, there is still speculation that politicians have a newfound sense of urgency and are stepping up attempts to stem the crisis. Unsurprisingly there is a wave of relief flowing through the financial sector with banks the biggest gainers on the day so far.

It will take a few more days of positive moves to convince spread betting investors that this rally actually has some solid foundations and is not just a dead cat bounce built on rumour and hope.

Looking ahead to the US open, at the moment we are expecting the Dow to start around 240 points higher when trading resumes. With little of note on the US economic calendar, it will be the extent to which traders are convinced by this latest European speculation that decides whether we will see these gains built on as the session unfolds.

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 Chris Beauchamp, Market Analyst, 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 Dixons Retail?

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

• Financial Spreads
• InterTrader
• IG Index

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

Spread Betting on Dixons Retail

If you want to invest in firms such as Dixons Retail then one solution is a spread bet on the Dixons Retail share price.

If an investor was to look at the capital spreads website, as of Thursday, they were showing the Dixons Retail Rolling Daily market at 10.0p – 10.3p. This means an investor could spread bet on the Dixons Retail share price:

• Moving above 10.3p, or
• Moving below 10.0p

When making a spread bet on UK shares you trade in £x per penny. So, if you decided to invest £15 per penny and the Dixons Retail share price changes by 5p then that would change your P&L by £75. £15 per penny x 5p = £75.

Rolling Daily Equities Markets

One important thing to note is that this is a ‘Rolling Daily Market’ and therefore there is no predetermined closing date for this market. Therefore, if you decide not to close your trade by the end of the day, it simply rolls over to the next session.

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

• Rise – then you normally pay a small overnight financing fee, or
• Fall – then you will normally receive a small credit to your account

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

Dixons Retail Rolling Daily Shares Trading Example

Now, if we consider the above spread of 10.0p – 10.3p and make the assumptions that:

• you have analysed the markets, and
• it leads you to feel that the Dixons Retail shares look like they will increase and move above 10.3p

then you may decide to go long of the market at 10.3p and risk, for the sake of argument, £25 per penny.

With such a bet you make a profit of £25 for every penny that the Dixons Retail shares push higher than 10.3p. Of course, such a bet also means that you will lose £25 for every penny that the Dixons Retail market decreases below 10.3p.

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 initial price you bought the spread at. You then multiply that price difference by the stake.

As a result, if the share price started to increase then you might think about closing your trade so that you can secure your profit.

Taking this a step further, if the market did go up then the spread, determined by the spread betting firm, could change to 13.1p – 13.4p. You would close your spread bet by selling at 13.1p. As a result, with the same £25 stake your profit would come to:

P&L = (Settlement Price – Opening Price) x stake
P&L = (13.1p – 10.3p) x £25 per penny stake
P&L = 2.8p x £25 per penny stake
P&L = £70.00 profit

Trading equities, by spread trading or otherwise, doesn’t always work out as you would have liked. In this case, you had bet that the share price would increase. Naturally, it can also go down.

If the Dixons Retail stock had fallen then you could choose to close your spread bet to limit your losses.

So if the spread pulled back to 6.8p – 7.1p you would close your position by selling at 6.8p. If so, this would result in a loss of:

P&L = (Settlement Price – Opening Price) x stake
P&L = (6.8p – 10.3p) x £25 per penny stake
P&L = -3.5p x £25 per penny stake
P&L = -£87.50 loss

Note – Dixons Retail Rolling Daily equities market correct as of 24-Nov-11.

Dixons Retail Spread Betting – More Details

For more information on trading Dixons Retail, also see Dixons Retail 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 International Personal Finance?

You can spread bet on International Personal Finance with any of the following companies:

• Financial Spreads
• Tradefair
• IGIndex

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

Spread Betting on International Personal Finance

If an investor decides to speculate on UK companies like International Personal Finance then one possibility is to spread trade on the International Personal Finance share price.

Looking at the Tradefair spread betting site, as of Thursday, they were showing the International Personal Finance Rolling Daily market at 178.8p – 180.5p. Therefore, you could spread trade on the International Personal Finance share price:

• Rising higher than 180.5p, or
• Falling lower than 178.8p

When financial spread trading on FTSE 350 shares you trade in £x per penny. So, if you choose to risk £30 per penny and the International Personal Finance shares move 5p then there would be a difference to your profit/loss of £150. £30 per penny x 5p = £150.

Rolling Daily Shares Markets

You should note that this is a ‘Rolling Daily Market’, therefore there is no predetermined closing date for this market. If your position is still open at the end of the day, it simply keeps rolling over into the next trading session.

If your bet does roll over and you are speculating on the market to:

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

If you would like a fully worked example then see Rolling Daily Spread Betting.

International Personal Finance Rolling Daily Shares Spread Trading Example

So, if we consider the above spread of 178.8p – 180.5p and make the assumptions that:

• you have done your analysis of the markets, and
• it leads you to feel that the International Personal Finance shares are likely to move above 180.5p

then you could decide that you want to buy a spread bet at 180.5p and invest £15 per penny.

With such a bet you win £15 for every penny that the International Personal Finance shares increase and go higher than 180.5p. Having said that, such a bet also means that you will make a loss of £15 for every penny that the International Personal Finance market decreases lower than 180.5p.

Put another way, if you buy a spread bet then your profits (or losses) are found by taking the difference between the settlement price of the market and the price you bought the spread at. You then multiply that price difference by your stake.

With this in mind, if after a few trading sessions the shares moved higher then you might want to close your position so that you can guarantee your profit.

If that happened then the spread, determined by the spread betting company, could be adjusted to 187.7p – 189.4p. You would settle/close your trade by selling at 187.7p. Accordingly, with the same £15 stake your profit would be calculated as:

Profit = (Closing Level – Initial Level) x stake
Profit = (187.7p – 180.5p) x £15 per penny stake
Profit = 7.2p x £15 per penny stake
Profit = £108.00 profit

Trading shares, whether by spread trading or otherwise, may not go to plan. In this example, you wanted the share price to increase. However, the share price can also go down.

If the International Personal Finance stock began to fall then you could close your trade to stop any further losses.

If the spread fell to 174.2p – 175.9p you would close your trade by selling at 174.2p. As a result, your loss would be:

Loss = (Closing Level – Initial Level) x stake
Loss = (174.2p – 180.5p) x £15 per penny stake
Loss = -6.3p x £15 per penny stake
Loss = -£94.50 loss

Note: International Personal Finance Rolling Daily spread betting price taken as of 24-Nov-11.

International Personal Finance Spread Betting – More Details

For more information on trading International Personal Finance, also see International Personal Finance 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.