Posts from — April 2012

A quiet start in London has seen the FTSE 100 financial spread betting market edge back slightly, with the leading index down around 15 points in mid-morning trading.

It might be the final trading day of the month, but it has been a decidedly lacklustre start to the week.

Markets in Tokyo and mainland China are closed for holidays, meaning that there has been little for European stock markets to go on this morning.

Once again, the Spanish situation is providing cause for concern. Anti-austerity protests took place over the weekend, and this morning we have had news confirming that Spain slipped back into recession in the first quarter of 2012.

In addition, S&P has downgraded 11 of Spain’s largest banks, mirroring its move last week on the national sovereign debt rating.

It is a busy week for economic news, with manufacturing data from China, the UK and the US tomorrow, and German unemployment on Wednesday.

The week will culminate with US Non Farm Payrolls data that will keep markets on edge from Wednesday onwards.

US markets are currently expected to kick-off broadly unchanged, as the quiet atmosphere envelops Wall Street as well.

On the schedule for today is US personal consumption data, the Chicago PMI and the Dallas Fed manufacturing index.

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.

Where to Spread Bet on AstraZeneca?

You can spread bet on AstraZeneca 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 AstraZeneca

If you are going to speculate on UK companies like AstraZeneca then one solution could be spread betting on the AstraZeneca share price.

If an investor was to look at the Financial Spreads spread trading website, as of Friday, they were showing the AstraZeneca Rolling Daily market at 2662.6p – 2666.4p. Therefore, an investor could spread trade on the AstraZeneca shares:

• Moving above 2666.4p, or
• Moving below 2662.6p

Whilst spread betting on FTSE 350 shares you trade in £x per penny. Therefore, if you decide to have a stake of £2 per penny and the AstraZeneca shares move 5p then that would make a difference to your profits (or losses) of £10. £2 per penny x 5p = £10.

Rolling Daily Shares Markets

This is a Rolling Daily Market which means that there is no predetermined closing 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 trading session.

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

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

To find out more about Rolling Daily Markets read our feature Rolling Daily Spread Betting.

AstraZeneca Rolling Daily Equities Trading Example

So, if we think about the spread of 2662.6p – 2666.4p and assume:

• you have analysed the markets, and
• it leads you to think that the AstraZeneca shares are likely to push above 2666.4p

then you could decide to buy at 2666.4p for a stake of £1 per penny.

So, you win £1 for every penny that the AstraZeneca shares increase and move higher than 2666.4p. Having said that, it also means that you will make a loss of £1 for every penny that the AstraZeneca market decreases below 2666.4p.

Thinking of this in a slightly different way, if you were to ‘Buy’ a spread bet then your P&L is found by taking the difference between the final price of the market and the price you bought the spread at. You then multiply that price difference by the stake.

With this in mind, if after a few sessions the stock started to increase then you might want to close your position in order to secure your profit.

Taking this a step further, if the market rose then the spread, set by the spread trading firm, might move up to 2783.7p – 2787.5p. You would close your trade by selling at 2783.7p. Accordingly, with the same £1 stake your profit would be:

Profit = (Closing Level – Initial Level) x stake
Profit = (2783.7p – 2666.4p) x £1 per penny stake
Profit = 117.3p x £1 per penny stake
Profit = £117.30 profit

Trading shares is not simple. In this example, you had bet that the share price would increase. Of course, it could fall.

If the AstraZeneca shares had fallen then you could close your spread bet in order to restrict your losses.

Should the market drop to 2559.7p – 2563.5p then you would close your trade by selling at 2559.7p. If so, your loss would be calculated as:

Loss = (Closing Level – Initial Level) x stake
Loss = (2559.7p – 2666.4p) x £1 per penny stake
Loss = -106.7p x £1 per penny stake
Loss = -£106.70 loss

Note – AstraZeneca Rolling Daily market accurate as of 27-Apr-12.

AstraZeneca Spread Betting – More Details

For more information on trading AstraZeneca, also see AstraZeneca 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 Hikma Pharmaceuticals?

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

• Financial Spreads
• InterTrader
• IGIndex

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

Spread Betting on Hikma Pharmaceuticals

If you decide to speculate on companies like Hikma Pharmaceuticals then one possibility could be to place a spread bet on the Hikma Pharmaceuticals share price.

Looking at the capital spreads spread betting website, as of Friday, they were showing the Hikma Pharmaceuticals Rolling Daily market at 606.7p – 609.8p. This means you can spread bet on the Hikma Pharmaceuticals share price:

• Going above 609.8p, or
• Going below 606.7p

When spread trading on UK shares you trade in £x per penny. So, if you invest £10 per penny and the Hikma Pharmaceuticals shares move 5p then that would change your profit/loss by £50. £10 per penny x 5p = £50.

Rolling Daily Shares Markets

This is a Rolling Daily Market which means that it does not have a closing date. As a result, if your trade is still open at the end of the trading day, it will roll over to the next session.

If you do let your position roll over into the next day and are spread betting on the market to:

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

For a more detailed guide to Rolling Daily Markets, including a fully worked example, please read our feature Rolling Daily Spread Betting.

Hikma Pharmaceuticals Rolling Daily Equities Spread Betting Example

So, if you think about the above spread of 606.7p – 609.8p and make the assumptions that:

• you have analysed the equities market, and
• you feel that the Hikma Pharmaceuticals shares will go above 609.8p

then you may decide that you are going to buy at 609.8p and invest £5 per penny.

With such a bet you win £5 for every penny that the Hikma Pharmaceuticals shares move higher than 609.8p. On the other hand, such a bet also means you will lose £5 for every penny that the Hikma Pharmaceuticals market falls lower than 609.8p.

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

With this in mind, if after a few trading sessions the stock started to increase then you might think about closing your trade so that you can guarantee your profit.

As an example, should the market rise, the spread, determined by the spread betting firm, could change to 629.6p – 632.7p. To close your position you would sell at 629.6p. Therefore, with the same £5 stake you would make:

Profit / loss = (Settlement Price – Opening Price) x stake
Profit / loss = (629.6p – 609.8p) x £5 per penny stake
Profit / loss = 19.8p x £5 per penny stake
Profit / loss = £99.00 profit

Trading equities, whether by spread trading or otherwise, is not always easy. In the above example, you had bet that the share price would increase. Nevertheless, it can also go down.

If the Hikma Pharmaceuticals shares weakened, against your expectations, then you could choose to close your position in order to limit your losses.

Should the spread fall back to 586.9p – 590.0p you would settle your position by selling at 586.9p. Therefore, you would make a loss of:

Profit / loss = (Settlement Price – Opening Price) x stake
Profit / loss = (586.9p – 609.8p) x £5 per penny stake
Profit / loss = -22.9p x £5 per penny stake
Profit / loss = -£114.50 loss

Note – Hikma Pharmaceuticals Rolling Daily spread taken as of 27-Apr-12.

Hikma Pharmaceuticals Spread Betting – More Details

For more information on trading Hikma Pharmaceuticals, also see Hikma Pharmaceuticals 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.

Morning trading so far has seen the FTSE shrug off Eurozone woes and gain around 10 points.

The current resilience of the index spread trading markets has been clearly restated this morning. Stock markets initially opened lower after last night’s Spanish downgrade, but rallied strongly to recover all losses and push firmly into the black.

Standard & Poor’s made a dramatic reappearance on the Eurozone stage last night, as it cut Spain’s rating from A to BBB.

This came on the expectation that the Spanish economy would shrink in 2012 and 2013, and that more support might be needed for the nation’s embattled banking sector.

As so often with downgrades, this is no more than a restatement of what we already expect, so the actual impact has been fairly muted.

The other agencies are likely to follow suit, but these moves will be of even less importance than S&P’s.

Strong results from Samsung and Amazon are helping to keep sentiment positive this morning, on what is a quiet day for results after a very busy week.

Looking to the afternoon, the key point will be US first-quarter GDP figures, with growth of 2.5% forecast, down from the 3% growth seen in the final three months of 2011.

After Bernanke’s cautiously optimistic comments earlier in the week, the hope is that today’s data will reflect his assessment of the world’s largest economy.

A flat start is expected for both the Wall Street index and the S&P 500, with both looking to open broadly unchanged from yesterday.

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.

A third successive up day for the FTSE has seen the leading index advance by around 25 points in morning trading.

One of the joys of Federal Reserve meetings is that they offer something for everyone, Bernanke being acutely aware of the impact that his comments can have on the financial spread betting markets.

Thus, a perusal of the news this morning shows stories that suggest that easing is both off the table and yet still likely if conditions worsen.

The net result is that markets remain fairly upbeat, given that Bernanke was both optimistic about the current state of the US, but also added that the central bank was prepared to do more if conditions worsen.

A plentiful corporate calendar this morning is also keeping UK spread betting investors busy, with Unilever, Kazakhmys, Shell, Barclays and Whitbread all updating the market.

Also in the news today is AstraZeneca, which dropped 4% on news of a boardroom coup, which comes in the wake of a sharp drop in profits.

It’s a busy day for earnings on the other side of the Atlantic as well, as Coca Cola, Pepsi, Starbucks and Exxon provide their quarterly updates.

Also out today are weekly jobless claims, the Chicago Fed activity index, pending home sales and the Kansas Fed manufacturing index.

Futures point to a quiet start for Wall Street, with the Dow opening around 25 points higher.

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.