Posts from — June 2012

Where to Spread Bet on Avocet Mining?

You can spread bet on Avocet Mining 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 Avocet Mining

If an investor decides to speculate on firms like Avocet Mining then one solution could be spread betting on the Avocet Mining share price.

Looking at the Inter Trader spread betting website, as of Friday, they were showing the Avocet Mining Rolling Daily market at 95.8p – 96.5p. This means you can spread bet on the Avocet Mining shares:

• Going higher than 96.5p, or
• Going lower than 95.8p

Whilst financial spread betting on FTSE 350 shares you trade in £x per penny. So, if you invest £15 per penny and the Avocet Mining share price moves 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 there is no set closing date for this market. If your trade is still open at the end of the trading day, it will roll over to the next trading day.

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

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

You can learn more in our feature Rolling Daily Spread Betting.

Avocet Mining Rolling Daily Equities Spread Betting Example

If you consider the above spread of 95.8p – 96.5p and make the assumptions:

• you have done your analysis of the markets, and
• you think that the Avocet Mining share price looks like it will push above 96.5p

then you may decide that you are going to buy at 96.5p and risk, for example, £20 per penny.

So, you gain £20 for every penny that the Avocet Mining shares increase and move higher than 96.5p. On the other hand, it also means you will make a loss of £20 for every penny that the Avocet Mining market decreases below 96.5p.

Looking at this from another angle, if you were to ‘Buy’ a spread bet then your profit/loss is worked out by taking the difference between the settlement price of the market and the price you bought the shares spread betting market at. You then multiply that difference in price by your stake.

As a result, if after a few sessions the stock moved higher then you might want to close your trade in order to guarantee your profit.

Taking this a step further, if the market rose then the spread might move to 101.8p – 102.5p. In order to close your trade you would sell at 101.8p. Therefore, with the same £20 stake your profit would be:

Your P&L = (Settlement Level – Initial Level) x stake
Your P&L = (101.8p – 96.5p) x £20 per penny stake
Your P&L = 5.3p x £20 per penny stake
Your P&L = £106.00 profit

Speculating on equities, by spread trading or otherwise, doesn’t always work out as you would have liked. In this case, you wanted the share price to go up. However, it could decrease.

If the Avocet Mining shares weakened, against your expectations, then you might choose to close your position in order to restrict your losses.

If the market fell to 91.9p – 92.6p then this means you would close your position by selling at 91.9p. This would result in a loss of:

Your P&L = (Settlement Level – Initial Level) x stake
Your P&L = (91.9p – 96.5p) x £20 per penny stake
Your P&L = -4.6p x £20 per penny stake
Your P&L = -£92.00 loss

Note: Avocet Mining Rolling Daily market taken as of 29-Jun-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.

A deal in Brussels among EU leaders has seen the FTSE 100 race higher, up around 60 points on hopes that Europe is finally pulling itself together.

So, is Europe now fixed? At the EU summit last night Italy and Spain used their combined strength to wring significant concessions from Germany.

This has provided online spread betting investors with reason to think that a real solution to the Eurozone crisis is not as far off as had been feared.

Both Madrid and Rome have something to celebrate. Spain are able to point to the new rule that allows rescue funds to be injected directly into struggling banks rather than being forced to go through the national government.

This reduces Spain’s debt burden, easing fears that a full bailout would be required.

As well as knocking Germany out of Euro 2012, Italy convinced the meeting that countries requesting assistance would not be subjected to close scrutiny in the way that Greece has been.

In the words of the Italian PM, ‘it is a double satisfaction for Italy’.

Such crowing might not go down well in Berlin, and Chancellor Merkel has begun to issue statements that have dulled the impact of the news.

Already the FTSE 100 spread betting market has edged back from the highs seen at the beginning of the session, indicating a degree of nervousness remains.

In the past, the Spanish bank rescue and the second Greek election each saw strong starts for the index spread betting markets quickly whittled away as the day wore on. It is entirely possible that today’s session could follow a similar pattern.

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 trading the FTSE 100 is down 40 points, as nerves ahead of the EU summit set in.

A sour mood has descended on financial markets this morning as investors await the beginning of the latest EU summit.

18 such previous summits have had no discernible effect on the crisis, being full of sound (and the occasional bit of fury) but ultimately signifying little.

A pre-summit meeting between the two ‘big beasts’ of the eurozone, Germany and France, failed to produce anything of substance, and it will probably be the same story with this get-together.

Yesterday’s better-than-expected US data is now a distant memory. The markets’ march higher was accompanied by a steady rise in Spanish and Italian yields, whose upward move has continued today.

Aside from the eurozone, the crisis engulfing Barclays continues to expand, with the bank losing almost 4% this morning.

The other major banks on the FTSE are also lower as fears grow that more institutions could be pulled into the rate-fixing scandal.

US markets are expected to open down this afternoon as the cautious atmosphere spreads across the Atlantic, with the S&P 500 opening around 7 points lower.

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 trading the FTSE is up around 15 points, although caution still predominates.

A few brave souls have edged into the index markets, but enthusiasm is distinctly lacking.

Most financial spread betting investors are opting to hold their ground and wait to see what decisions, if any, emerge from the Eurozone summit this week.

It would be hard to lower expectations any further, since we have been here many times before, but this time there is a sense that any lack of progress will be met with severe fallout.

The fundamental sticking point remains the fact that Germany refuses to pick up the bill for everyone else.

Comments from Governor Sir Mervyn King about the uncertainty surrounding the crisis really does underline the point that the future looks more worrying now than it has done for some time.

Dow futures are currently pointing to a slow start for Wall Street, with the likelihood being that our American cousins will replicate the quiet trading seen in Europe.

US durable goods and pending home sales figures are released this afternoon, but the centre of attention remains the upcoming Eurozone summit.

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.

A slow start to the day has seen the FTSE spread betting index move only fractionally higher, held back by ongoing caution regarding the Eurozone.

Then there were five; Cyprus became the fifth country last night to seek financial assistance from its European partners.

The country had just days left to recapitalise one of its largest banks, or it risked running out of cash.

Although the sums involved, around €10 billion, are relatively small when compared to Spain, it’s a sign of how widespread the crisis really is.

Finance ministers from the big four Eurozone countries, France, Germany, Italy and Spain, will assemble in Paris today for preliminary talks.

While there might be discussion of tighter EU control of national budgets, this morning’s reports indicate that there would be no progress on closer fiscal union until the end of this year.

At this rate, there might not be a Eurozone left by then.

This morning’s auction of short-term Spanish notes saw yields rise dramatically, and further colour will be provided when data on Rome’s auction comes through.

In UK shares trading, online supermarket Ocado is suffering heavily this morning.

The stock is down by 15% as the company warned of difficult months to come thanks to the Olympics.

The company is up 68% for the year so far, however, so its 2012 recovery is still mostly intact.

In the US, stock markets are only expected to move slightly higher this afternoon. However, US data, which will include the Case-Shiller housing index and the Richmond Fed index, might help to add some vigour to the session.

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.