Posts from — May 2012

In mid-morning trading the FTSE has pushed higher, gaining 40 points as it attempts to regain ground lost in yesterday’s sell-off.

Today is one of those ‘calm after the storm’ days, as everyone dusts themselves down and tries to work out their next move.

Spanish and Italian yields have edged lower, while the dollar index is slightly down this morning.

Nonetheless sentiment remains fragile, since Spain is still only a few basis points away from a bailout.

A referendum in Ireland today will keep index spread trading markets cautious, although it seems that the Irish people will do as they are bid by the EU, removing at least one point of uncertainty.

A quietening-down in the Eurozone means that corporate news can come to the fore, and today’s star is Logica, surging 60% on news of a bid worth £1.7 billion by Canadian firm CGI.

US ADP employment data comes out today, firing the starting gun on the run to Non Farm Payrolls tomorrow, and we also have US GDP figures along with the Chicago PMI out this afternoon.

After a loss of around 120 points last night on the Dow, the index is forecast to open up 25 points at around 12,445.

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.

In mid-morning trading the FTSE 100 is back in the red, dropping 60 points as Eurozone worries take centre stage once again.

Without wishing to sound apocalyptic, it does feel as if Spain is gradually shuffling towards the abyss.

Yields on Spanish bonds are spiking once again, with the benchmark 10-year yields now at 6.57%, far too close for comfort to the 7% ‘bailout’ level.

The ECB has thrown Spain’s plans to recapitalise Bankia out the window, leaving Madrid on its own, although the result has only been to stiffen Spain’s insistence that the ECB put its weight behind the rescue plan.

Financial spread betting investor confidence is waning by the day, and it could only be a matter of time before the Spanish government is forced to ask for financial aid.

This would be an event of a far greater magnitude than the bailouts of Ireland, Portugal and Greece, since Spain’s size means it would exhaust Europe’s financial firepower.

Meanwhile, China has issued yet another denial of plans to reintroduce stimulus measures, causing mining shares to drop across the board.

With only US pending home sales out today, all eyes remain focussed on the unfolding crisis in Europe.

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 100 is positive, but short of earlier highs.

It’s lining up to be another push-me/pull-you session today, as some early strength in the FTSE index has run out of steam in the 5400 area. This level has successfully stalled rallies for the past week.

It also looks like UK spread betting investors are reluctant to commit too much to the bullish cause until we see what happens in US markets this afternoon.

A drop in third-quarter revenues for Wolseley has put the building services group down by 4% on the day, the biggest loser so far.

We have seen some appetite for buying into weakness near the lows for the year just below 2100p. However, traders may be happy to just stand aside for today and let some of the dust settle after this morning’s announcement.

US markets are back today after Monday’s holiday. At the moment Dow futures are suggesting that the index will open around 80 points higher than Friday’s close, at 12,535.

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.

In mid-morning trade the FTSE 100 is up around 40 points on some positive news from Greece.

Poll results suggesting that a pro-austerity party will end up with the largest share of votes in the Greek election has lifted spirits this morning, pushing the FTSE 100 back to the 5400 mark.

The reaction to these poll results may be seen as a bit fickle as we have got used to any positive news quickly getting swamped by the next tranche of disappointment. However, the boost to sentiment has lifted the London index back to its best levels for nearly a week.

With the US closed for its Memorial Day holiday, it is probably going to be a quiet afternoon and the weather could mean that lunch breaks end up being a little longer than usual.

The last week or so has seen a gradual recovery for stock markets indices and it does feel as if UK shares could grind out a few more gains over the week.

US markets are of course closed today but our ‘out of hours’ market on the Dow is currently trading around 50 points higher than Friday’s close.

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 Cape?

You can spread bet on Cape 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 Cape

If an investor is looking to speculate on firms like Cape then one option could be to place a spread bet on the Cape share price.

If you were to look at the FinancialSpreads spread betting site, as of Friday, they were showing the Cape Rolling Daily market at 200.2p – 201.3p. As a result, you could spread trade on the Cape shares:

• Going higher than 201.3p, or
• Going lower than 200.2p

Whilst spread trading on UK equities you trade in £x per penny. As a result, if you decided to have a stake of £20 per penny and the Cape shares move 5p then that would be a difference to your profits (or losses) of £100. £20 per penny x 5p = £100.

Rolling Daily Shares Markets

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

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

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

For a fully worked example see Rolling Daily Spread Betting.

Cape Rolling Daily Shares Spread Trading Example

So, if we think about the above spread of 200.2p – 201.3p and make the assumptions:

• you have done your market analysis, and
• you feel that the Cape shares will increase and move above 201.3p

then you might decide that you are going to buy at 201.3p for a stake of, for example, £10 per penny.

This means that you win £10 for every penny that the Cape shares move higher than 201.3p. However, it also means that you will lose £10 for every penny that the Cape market moves below 201.3p.

Looked at another way, if you ‘Buy’ a spread bet then your profits (or losses) are worked out 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.

Therefore, if after a few hours the stock rose then you might want to close your spread bet so that you can lock in your profit.

Taking this a step further, if the market rose then the spread, determined by the spread betting firm, could change to 209.9p – 211.0p. In order to close your spread bet you would sell at 209.9p. Accordingly, with the same £10 stake this trade would result in a profit of:

Profit = (Final Level – Initial Level) x stake
Profit = (209.9p – 201.3p) x £10 per penny stake
Profit = 8.6p x £10 per penny stake
Profit = £86.00 profit

Speculating on equities is not always simple. In this example, you had bet that the share price would rise. Naturally, it can also fall.

If the Cape share price dropped then you could close your trade in order to restrict your losses.

So if the financialspreads.com spread betting market dropped to 191.7p – 192.8p you would settle your position by selling at 191.7p. If so, your loss would be calculated as:

Loss = (Final Level – Initial Level) x stake
Loss = (191.7p – 201.3p) x £10 per penny stake
Loss = -9.6p x £10 per penny stake
Loss = -£96.00 loss

Note – Cape Rolling Daily equities market correct as of 25-May-12.

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.