Where to Spread Bet on FirstGroup?

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

• Financial Spread
• InterTrader
• IGIndex

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

Spread Betting on FirstGroup

If an investor wants to invest in firms such as FirstGroup then one solution could be spread trading on the FirstGroup share price.

If you were to look at the InterTrader spread betting website, as of Friday, they were showing the FirstGroup Rolling Daily market at 242.9p – 243.9p. This means an investor can spread bet on the FirstGroup share price:

• Rising above 243.9p, or
• Falling below 242.9p

Whilst spread trading on UK equities you trade in £x per penny. As a result, should you decide to invest £20 per penny and the FirstGroup share price moves 5p then there would be a difference to your bottom line of £100. £20 per penny x 5p = £100.

Rolling Daily Shares Markets

You should note that this is a Rolling Daily Market which means that there is no settlement date for this market. If your trade is open at the end of the day, it just rolls over to the next day.

If a trade is rolled over and you are spread betting on the market to:

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

You can find more on Rolling Daily Markets, as well as a fully worked example, in our feature Rolling Daily Spread Betting.

FirstGroup Rolling Daily Shares Trading Example

Now, if you consider the spread of 242.9p – 243.9p and assume that:

• you have done your analysis of the markets, and
• it leads you to think that the FirstGroup share price will go higher than 243.9p

then you might buy at 243.9p for a stake of £10 per penny.

Therefore, you win £10 for every penny that the FirstGroup shares rise above 243.9p. Nevertheless, you will make a loss of £10 for every penny that the FirstGroup market goes lower than 243.9p.

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

As a result, if after a few trading sessions the share price started to increase then you might want to close your trade and therefore guarantee your profits.

Taking this a step further, if the market rose then the spread, set by the spread betting company, might move up to 251.6p – 252.6p. You would close your position by selling at 251.6p. So, with the same £10 stake your profit would come to:

Profit / loss = (Settlement Level – Initial Level) x stake
Profit / loss = (251.6p – 243.9p) x £10 per penny stake
Profit / loss = 7.7p x £10 per penny stake
Profit / loss = £77.00 profit

Speculating on equities, whether by spread betting or otherwise, may not go to plan. In this example, you wanted the share price to increase. Nevertheless, the share price could go down.

If the FirstGroup stock dropped then you might decide to settle/close your spread bet in order to limit your losses.

Should the spread fall back to 234.8p – 235.8p you would settle your trade by selling at 234.8p. If so, this would result in a loss of:

Profit / loss = (Settlement Level – Initial Level) x stake
Profit / loss = (234.8p – 243.9p) x £10 per penny stake
Profit / loss = -9.1p x £10 per penny stake
Profit / loss = -£91.00 loss

Note: FirstGroup Rolling Daily market correct as of 30-Mar-12.

FirstGroup Spread Betting – More Details

For more information on trading FirstGroup, also see FirstGroup 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.