Posts from — February 2012

Indices are in wait and see mode this morning, with the FTSE spread betting market down 4 points ahead of the ECB’s next major refinancing operation.

The bulls continue to dutifully hold the line in financial spread betting markets, keeping stocks near their recent highs, but they are keeping their powder dry in advance of the imminent liquidity injection from the ECB.

The last LTRO proved to be a definitive ‘risk on’ moment, providing plenty of cheap cash to support Eurozone bonds, thus easing one of the most obvious manifestations of the debt crisis.

Some will be hoping for a similarly positive impact from today’s efforts, but there is always the risk that markets will sell-off after the fact, particularly if the amount disbursed is smaller than expected.

In company news, ITV and International Airlines both rose this morning following news of increased profits for 2011, but house builder Taylor Wimpey dropped after failing to match the upbeat reports provided by its peers earlier in the week.

US GDP revisions are published today, although no change is expected to the initial figures. Also out today will be the Chicago PMI and then the Beige Book survey.

Dow futures are currently up 10 points, suggesting another slow start to the day in the US, but all this could change once the news of the ECB’s liquidity operation comes through.

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.

In mid-morning trade, the FTSE 100 is slightly higher.

It’s another muted start for UK shares spread betting markets, but blue-chips have had a slight lift following last night’s positive vote for the Greek bailout by the German parliament.

Mining shares are amongst the biggest gainers, which always helps the index, but even this volatile sector is only up by 1-2%.

Last night on Wall Street, the S&P 500 spread betting market did briefly set fresh highs for the five-month recovery.

However, the relatively low volume in recent weeks is leading some to question the sustainability of this strength, which goes some way to explaining the ongoing caution we are seeing on this side of the Atlantic.

Looking ahead to today’s US session, at the moment we are expecting the Dow Jones index spread trading market to start around 40 points higher at 13,022.

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, 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 the FTSE is drifting lower, down by around 40 points.

There is no single obvious reason for the weakness this morning, just the continued ‘up one day, down the next’ trading theme we have seen for the past few weeks.

Banking stocks are weighing a little on sentiment, despite good HSBC results.

There does seem to have been more of a tone of caution creeping back into stock market indices over the past week, after the FTSE 100 has already gained around 8% for the year so far.

There are the usual concerns that, despite last week’s Greek deal, the European debt crisis could well make an unwelcome return to the front pages in the not too distant future.

We also had the US crude oil spread betting market flirting with the $110 per barrel mark on Friday, another potential storm cloud for the economy.

As a result, we shouldn’t be too surprised at the reluctance in committing fresh speculative money to equities at this point.

Looking ahead to the US, at the moment we expect the Dow Jones to start around 65 points lower this afternoon at 12,918.

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.

Where to Spread Bet on Rexam?

You can spread bet on Rexam 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 Rexam

Should an investor decide to invest in companies such as Rexam then one possibility is to spread bet on the Rexam share price.

Looking at the Tradefair spread betting website, as of Friday, they were showing the Rexam Rolling Daily market at 418.3p – 419.2p. As a result, you can spread trade on the Rexam share price:

• Moving higher than 419.2p, or
• Moving lower than 418.3p

Whilst making a spread bet on UK shares you trade in £x per penny. Therefore, if you decide to have a stake of £10 per penny and the Rexam shares move 5p then that would be a difference to your profit/loss 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 therefore there is no settlement date for this market. If you decide to leave your trade open at the end of the day, it simply keeps rolling over into the next day.

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

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

You can learn more about Rolling Daily Markets in our article Rolling Daily Spread Betting.

Rexam Rolling Daily Shares Trading Example

Now, if we think about the spread of 418.3p – 419.2p and assume that:

• you have done your analysis of the markets, and
• it leads you to think that the Rexam share price is likely to increase and go higher than 419.2p

then you could decide to buy a spread bet at 419.2p for a stake of, let’s say, £5 per penny.

Therefore, you make a profit of £5 for every penny that the Rexam shares increase and move above 419.2p. Nevertheless, it also means that you will make a loss of £5 for every penny that the Rexam market moves lower than 419.2p.

Put another way, if you were to buy a spread bet then your profit/loss is 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 price difference by your stake.

With this in mind, if after a few sessions the shares rose then you might consider closing your spread bet so that you can lock in your profit.

Therefore, if the market moved up then the spread might move to 440.2p – 441.1p. You would close/settle your spread bet by selling at 440.2p. So, with the same £5 stake you would make a profit of:

P&L = (Final Level – Initial Level) x stake
P&L = (440.2p – 419.2p) x £5 per penny stake
P&L = 21.0p x £5 per penny stake
P&L = £105.00 profit

Shares spread betting may not always go to plan. In this example, you had bet that the share price would rise. Naturally, it might decrease.

If the Rexam share price began to drop then you could choose to close your position in order to limit your losses.

If the market dropped to 395.5p – 396.4p you would sell back your position at 395.5p. As a result, your loss would be:

P&L = (Final Level – Initial Level) x stake
P&L = (395.5p – 419.2p) x £5 per penny stake
P&L = -23.7p x £5 per penny stake
P&L = -£118.50 loss

Note: Rexam Rolling Daily market taken as of 24-Feb-12.

Rexam Spread Betting – More Details

For more information on trading Rexam, also see Rexam 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 CSR?

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

• Financial Spread
• Inter Trader
• IG Index

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

Spread Betting on CSR

Should an investor decide to speculate on companies like CSR then one solution could be spread betting on the CSR share price.

Looking at the InterTrader spread trading website, as of Friday, they were showing the CSR Rolling Daily market at 250.6p – 252.0p. Therefore, an investor could spread trade on the CSR shares:

• Moving above 252.0p, or
• Moving below 250.6p

When spread trading on UK equities you trade in £x per penny. As a result, if you staked £15 per penny and the CSR share price changes by 5p then that would change your P&L by £75. £15 per penny x 5p = £75.

Rolling Daily Equities Markets

Be aware that this is a Rolling Daily Market which means that unlike a normal spread betting futures market, there is no 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 trading session.

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

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

You can learn more about Rolling Daily Markets in our article Rolling Daily Spread Betting.

CSR Rolling Daily Equities Trading Example

Now, if we consider the above spread of 250.6p – 252.0p and make the assumptions that:

• you have done your research, and
• it leads you to think that the CSR shares will rise above 252.0p

then you may decide that you want to go long of the market at 252.0p and invest £10 per penny.

With such a bet you win £10 for every penny that the CSR shares increase and move higher than 252.0p. Nevertheless, such a bet also means that you will make a loss of £10 for every penny that the CSR market moves lower than 252.0p.

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

As a result, if the shares moved higher then you could consider closing your spread bet and therefore lock in your profits.

If that happened then the spread, set by the spreads firm, might be adjusted to 262.1p – 263.5p. In order to close your spread bet you would sell at 262.1p. Therefore, with the same £10 stake your profit would be calculated as:

Profit = (Closing Level – Initial Level) x stake
Profit = (262.1p – 252.0p) x £10 per penny stake
Profit = 10.1p x £10 per penny stake
Profit = £101.00 profit

Spread betting is not easy. In this case, you wanted the share price to go up. Nevertheless, the share price might go down.

If the CSR share price dropped then you might decide to settle/close your spread bet in order to limit your losses.

So if the market dropped to 243.2p – 244.6p you would settle your trade by selling at 243.2p. This would result in a loss of:

Loss = (Closing Level – Initial Level) x stake
Loss = (243.2p – 252.0p) x £10 per penny stake
Loss = -8.8p x £10 per penny stake
Loss = -£88.00 loss

Note: CSR Rolling Daily equities market accurate as of 24-Feb-12.

CSR Spread Betting – More Details

For more information on trading CSR, also see CSR 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.