Where to Spread Bet on Petrofac?

You can spread bet on Petrofac 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 Petrofac

If you decide to speculate on companies like Petrofac then one option is to spread trade on the Petrofac share price.

If you were to look at the Capitalspreads website, as of Friday, they were showing the Petrofac Rolling Daily market at 1674.1p – 1677.9p. Therefore, an investor can spread trade on the Petrofac share price:

• Increasing above 1677.9p, or
• Decreasing below 1674.1p

Whilst financial spread trading on FTSE 350 shares you trade in £x per penny. Therefore, if you decide to invest £4 per penny and the Petrofac share price changes by 5p then there would be a difference to your bottom line of £20. £4 per penny x 5p = £20.

Rolling Daily Equities Markets

You should note that this is a ‘Rolling Daily Market’, therefore unlike a normal spread betting futures market, there is no settlement date. If your trade is still open at the end of the trading day, it just rolls over into the next day.

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

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

Our article Rolling Daily Spread Betting goes into more detail about Rolling Daily Markets and includes a fully worked example.

Petrofac Rolling Daily Equities Trading Example

If you consider the spread of 1674.1p – 1677.9p and assume that:

• you have done your research, and
• it leads you to feel that the Petrofac shares look like they will increase and go higher than 1677.9p

then you may go long of the market at 1677.9p for a stake of, for example, £2 per penny.

With such a spread bet you make a profit of £2 for every penny that the Petrofac shares go above 1677.9p. However, you will lose £2 for every penny that the Petrofac market moves below 1677.9p.

Looked at another way, should you 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 market at. You then multiply that price difference by the stake.

If after a few days the shares started to increase then you might want to close your position to lock in your profit.

As an example, should the market rise, the spread, determined by the spread betting company, could be adjusted to 1736.6p – 1740.4p. You would settle/close your trade by selling at 1736.6p. As a result, with the same £2 stake your profit would come to:

P&L = (Final Level – Initial Level) x stake
P&L = (1736.6p – 1677.9p) x £2 per penny stake
P&L = 58.7p x £2 per penny stake
P&L = £117.40 profit

Speculating on equities, whether by financial spread trading or otherwise, is not always simple. In this example, you had bet that the share price would increase. However, it can also decrease.

If the Petrofac stock had fallen then you might choose to close your position in order to limit your losses.

So if the spread pulled back to 1625.0p – 1628.8p then you would close your position by selling at 1625.0p. That would mean you would lose:

P&L = (Final Level – Initial Level) x stake
P&L = (1625.0p – 1677.9p) x £2 per penny stake
P&L = -52.9p x £2 per penny stake
P&L = -£105.80 loss

Note – Petrofac Rolling Daily equities market quoted as of 09-Mar-12.

Petrofac Spread Betting – More Details

For more information on trading Petrofac, also see Petrofac 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.