Category — Financial Spread Betting Tips

In mid-morning trade, the FTSE is slightly higher as the retail sector comes into focus.

The FTSE 100 is trading above 5700, although off earlier highs as investors start digesting the first trading updates from retailers.

High street chain Next has kicked off first, with a 3.1% rise in the second half of 2011 coming in below expectations.

The company admitted that this increase was disappointing when weather had affected so much retail business in 2010.

The shares are the biggest blue-chip loser on the day so far, down by around 3%. However, this still leaves them a third higher than this time last year and the initial opening drop has tempted out some bargain hunters at these levels.

Looking ahead to the US open, at the moment the Dow is expected to start broadly unchanged from yesterday’s close.

Although yesterday was a positive session on Wall Street, the stock market indices did close near the lows for the day, so a continuation of this sentiment could weigh on the FTSE this afternoon.

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 Ben Critchley, 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 Cable & Wireless Worldwide?

You can spread bet on Cable & Wireless Worldwide with any of the following companies:

• Financial Spreads
• Tradefair
• IG Index

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

Spread Betting on Cable & Wireless Worldwide

If you decide to speculate on UK listed companies like Cable & Wireless Worldwide then one option could be to spread trade on the Cable & Wireless Worldwide share price.

If an investor was to look at the capital spreads website, as of Thursday, they were showing the Cable & Wireless Worldwide Rolling Daily market at 20.7p – 20.9p. This means you can spread bet on the Cable & Wireless Worldwide shares:

• Going above 20.9p, or
• Going below 20.7p

Whilst financial spread betting on UK shares you trade in £x per penny. So, should you decide to invest £15 per penny and the Cable & Wireless Worldwide shares move 5p then that would change your P&L by £75. £15 per penny x 5p = £75.

Rolling Daily Shares Markets

One important thing to note is that this is a Rolling Daily Market and so it does not have a set closing date. If you decide to leave your trade open at the end of the day, it simply keeps rolling over into the next day.

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

• Go up – then you would normally pay a small financing fee, or
• Go down – then you will normally receive a small credit to your account

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

Cable & Wireless Worldwide Rolling Daily Shares Spread Trading Example

So, if we think about the spread of 20.7p – 20.9p and assume:

• you have analysed the equities market, and
• you feel that the Cable & Wireless Worldwide share price will move above 20.9p

then you could decide to buy a spread bet at 20.9p and invest £25 per penny.

With such a bet you win £25 for every penny that the Cable & Wireless Worldwide shares push higher than 20.9p. On the other hand, it also means you will lose £25 for every penny that the Cable & Wireless Worldwide market goes below 20.9p.

Thinking of this in a slightly different way, should you buy a spread bet then your profit/loss is calculated by taking the difference between the closing price of the market and the price you bought the spread at. You then multiply that difference in price by your stake.

If after a few hours the stock moved higher then you might want to close your position in order to secure your profit.

As an example, should the market rise, the spread might move to 24.0p – 24.2p. You would close/settle your spread bet by selling at 24.0p. As a result, with the same £25 stake your profit would come to:

Your profits (or losses) = (Final Price – Opening Price) x stake
Your profits (or losses) = (24.0p – 20.9p) x £25 per penny stake
Your profits (or losses) = 3.1p x £25 per penny stake
Your profits (or losses) = £77.50 profit

Speculating on shares is not always straightforward. In the above example, you wanted the share price to increase. However, the share price could fall.

If the Cable & Wireless Worldwide shares began to drop then you might choose to close your spread bet in order to restrict your losses.

If the spread fell to 17.3p – 17.5p then this means you would close your position by selling at 17.3p. Therefore, you would make a loss of:

Your profits (or losses) = (Final Price – Opening Price) x stake
Your profits (or losses) = (17.3p – 20.9p) x £25 per penny stake
Your profits (or losses) = -3.6p x £25 per penny stake
Your profits (or losses) = -£90.00 loss

Note – Cable & Wireless Worldwide Rolling Daily market accurate as of 17-Nov-11.

Cable & Wireless Worldwide Spread Betting – More Details

For more information on trading Cable & Wireless Worldwide, also see Cable & Wireless Worldwide 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 Mothercare?

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

• Financial Spreads
• Inter Trader
• IGIndex

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

Spread Betting on Mothercare

If an investor decides to invest in firms like Mothercare then one solution could be to spread bet on the Mothercare share price.

Looking at the InterTrader website, as of Thursday, they were showing the Mothercare Rolling Daily market at 135.9p – 139.3p. This means you could spread bet on the Mothercare share price:

• Increasing higher than 139.3p, or
• Decreasing lower than 135.9p

When making a spread bet on FTSE 350 shares you trade in £x per penny. Therefore, if you staked £10 per penny and the Mothercare share price changes by 5p then that would be a difference to your profits (or losses) of £50. £10 per penny x 5p = £50.

Rolling Daily Equities Markets

One important thing to note is that this is a Rolling Daily Market and so there is no preset closing date for this market. Should your trade be left open at the end of the trading day, it will roll over to the next session.

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

• Move higher – then you are charged a small overnight financing fee, or
• Move lower – then a small payment is often credited to your account

For a more detailed example see Rolling Daily Spread Betting.

Mothercare Rolling Daily Equities Spread Trading Example

Now, if we think about the above spread of 135.9p – 139.3p and assume that:

• you have done your market research, and
• it leads you to think that the Mothercare shares will increase and go higher than 139.3p

then you could buy at 139.3p for a stake of, for the sake of argument, £15 per penny.

So, you win £15 for every penny that the Mothercare shares move above 139.3p. Conversely, however, it also means that you will lose £15 for every penny that the Mothercare market goes below 139.3p.

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

If after a few days the share price rose then you might consider closing your position in order to secure your profit.

Therefore, if the market moved up then the spread, set by the spread betting company, could change to 146.3p – 149.7p. In order to close your position you would sell at 146.3p. So, with the same £15 stake your profit would be calculated as:

Profit / loss = (Settlement Level – Initial Level) x stake
Profit / loss = (146.3p – 139.3p) x £15 per penny stake
Profit / loss = 7.0p x £15 per penny stake
Profit / loss = £105.00 profit

Trading shares, whether by spread trading or otherwise, doesn’t always work out as you would have liked. With this example, you had bet that the share price would go up. Naturally, it could fall.

If the Mothercare shares had started to drop then you could close your position in order to restrict your losses.

Should the market drop to 131.6p – 135.0p then you would close your position by selling at 131.6p. That would mean you would make a loss of:

Profit / loss = (Settlement Level – Initial Level) x stake
Profit / loss = (131.6p – 139.3p) x £15 per penny stake
Profit / loss = -7.7p x £15 per penny stake
Profit / loss = -£115.50 loss

Note – Mothercare Rolling Daily spread betting price correct as of 17-Nov-11.

Mothercare Spread Betting – More Details

For more information on trading Mothercare, also see Mothercare 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.

In mid-morning trade, the FTSE 100 has made a good start to the week, up by around 1% so far.

There seems to be no stopping investor optimism at the moment, with blue-chips in London continuing to build on gains in recent weeks, pushing the FTSE 100 out to its best levels since 04 August.

Once again, weekend reassurance from politicians is keeping positive sentiment on the boil, with the G20 meeting suggesting that this weekend’s EU summit will come up with firm measures to solve the debt crisis.

Again this has resulted in a broad-based rally, with miners strong on the hope of increased demand from a calmer world economy. In spread betting, banks are also benefitting from the belief that an end to the crisis is in sight.

Looking ahead to the US, at the moment we are expecting the Dow to start around 40 points higher when Wall Street opens.

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 Hargreaves Lansdown?

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

• Financial Spreads
• Inter Trader
• IG Index

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

Spread Betting on Hargreaves Lansdown

If you are looking to invest in firms like Hargreaves Lansdown then one option could be to place a spread bet on the Hargreaves Lansdown share price.

If an investor was to look at the Tradefair site, as of Friday, they were showing the Hargreaves Lansdown Rolling Daily market at 500.7p – 502.3p. As a result, you can spread bet on the Hargreaves Lansdown shares:

• Rising higher than 502.3p, or
• Falling lower than 500.7p

When making a spread bet on UK equities you trade in £x per penny. So, should you choose to invest £10 per penny and the Hargreaves Lansdown share price changes by 5p then that would be a difference to your profits (or losses) of £50. £10 per penny x 5p = £50.

Rolling Daily Shares Markets

You should note that this is a ‘Rolling Daily Market’, therefore there is no preset closing date for this market. If your position is still open at the end of the day, it simply rolls over to the next session.

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

• Go higher – then you will normally be charged a small financing fee, or
• Go lower – then a small payment is normally credited to your account

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

Hargreaves Lansdown Rolling Daily Shares Trading Example

If you think about the spread of 500.7p – 502.3p and assume that:

• you have done your analysis of the markets, and
• it leads you to feel that the Hargreaves Lansdown shares look like they will increase and go higher than 502.3p

then you could decide that you are going to buy at 502.3p and invest £5 per penny.

With such a spread bet you make a profit of £5 for every penny that the Hargreaves Lansdown shares increase and move above 502.3p. Of course, such a bet also means that you will make a loss of £5 for every penny that the Hargreaves Lansdown market decreases lower than 502.3p.

Looking at this from another angle, if you were to ‘Buy’ a spread bet then your P&L is 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 difference in price by the stake.

If after a few trading sessions the stock started to increase then you might want to close your spread bet so that you can guarantee your profit.

Therefore, if the market moved up then the spread might move to 521.1p – 522.7p. In order to close your trade you would sell at 521.1p. So, with the same £5 stake your profit would be calculated as:

Profit = (Final Price – Initial Price) x stake
Profit = (521.1p – 502.3p) x £5 per penny stake
Profit = 18.8p x £5 per penny stake
Profit = £94.00 profit

Financial spread betting is not easy. In the above example, you wanted the share price to rise. However, it can also decrease.

If the Hargreaves Lansdown shares weakened, against your expectations, then you could close your position in order to limit your losses.

Should the spread pull back to 486.0p – 487.6p then this means you would settle your spread bet by selling at 486.0p. As a result, your loss would be:

Loss = (Final Price – Initial Price) x stake
Loss = (486.0p – 502.3p) x £5 per penny stake
Loss = -16.3p x £5 per penny stake
Loss = -£81.50 loss

Note: Hargreaves Lansdown Rolling Daily spread betting price taken as of 02-Sep-11.

Hargreaves Lansdown Spread Betting – More Details

For more information on trading Hargreaves Lansdown, also see Hargreaves Lansdown 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.