Category — Financial Spread Betting

In mid-morning trade, the UK 100 index is up 18 points, as the bulls do their best to keep pushing higher.

Another day dawns without a Greek deal, or even much sign of real progress towards one.

However, London’s leading index has managed to push back above the 5900 level, with both the heavyweight banks and miners marching higher, the latter doing so after a difficult day yesterday due to concerns over China.

Decent earnings from US icon Coca Cola last night have put more energy into the rally, although fairly low volumes for US markets are helping to put a better face on the rise than might otherwise be the case.

Weaker German data, with exports dropping in December 2011 by their largest amount in almost three years, helped to hold markets back. The data suggests that the eurozone’s powerhouse economy may not be able to avoid a new recession.

The quiet week for US economic data continues, with no figures of any weight out today.

However, the corporate calendar is busier, with Cisco and Time Warner reporting, and Groupon releasing its first quarterly results as a publicly-quoted company.

Dow futures point to small gains for Wall Street this afternoon, with the premier US index up 19 points.

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.

Greek worries are once again acting as the main drag on UK shares this morning, with the FTSE down around 15 points in mid-morning trade.

We continue to await news from Athens, and investors are switching to defensive stocks as news of a Greek deal continues to elude us.

Greek workers are on strike yet again, highlighting the fact that even if politicians do hammer out an agreement, the implementation of more cuts will prove difficult to say the least.

Official confirmation of the terms of Glencore’s bid for Xstrata has done nothing to lift the mining sector, as investors abandon this racier part of the index for the safety of such stalwarts as National Grid and Shire Pharmaceuticals.

The fact that losses have been limited so far this week suggests a degree of relaxation about Greece, with investors fairly hopeful that a deal will somehow be reached.

The after-effect of Friday’s Non Farms data continues to be felt, but we will need something extra to push markets much higher.

With the economic calendar still fairly light, such an event seems unlikely to be forthcoming.

At present the Dow is expected to start the day just 6 points lower, after a very quiet session last night.

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 Rupert Osborne, Futures Dealer, 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, shares have come under some pressure as Greece slides back into centre stage.

In early trading, we are seeing some of the post-payrolls euphoria starting to fade, leaving the FTSE down around 30 points on the day so far.

A combination of index heavyweights from the mining and financial sectors are pulling the market a little lower, but so far this is just being seen as a slight pull-back from the sharp gains on Friday afternoon.

With a relatively quiet news week until the EU and UK interest rate announcements on Thursday, progress or otherwise in Greece is likely to dictate direction for the indices spread betting markets.

Already today there has been some confusion, with many thinking there was a deadline this morning for the latest stage in talks, but this has been denied by Greece.

With the last four months having seen a 25% rise in the Dow Jones, any further heel-dragging from the continent could start to encourage investors to take some money off the table and await further developments.

Looking ahead to the US open, at the moment we are expecting the Dow to start around 75 points lower 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 Glencore?

You can spread bet on Glencore 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 Glencore

If you are going to speculate on UK companies such as Glencore then one solution could be to place a spread bet on the Glencore share price.

If an investor was to look at the InterTrader website, as of Friday, they were showing the Glencore Rolling Daily market at 469.5p – 470.5p. As a result, an investor could spread bet on the Glencore shares:

• Moving above 470.5p, or
• Moving below 469.5p

Whilst spread betting on FTSE 350 shares you trade in £x per penny. As a result, if you decided to invest £10 per penny and the Glencore share price changes by 5p then that would change your P&L by £50. £10 per penny x 5p = £50.

Rolling Daily Shares Markets

One important thing to note is that this is a Rolling Daily Market and so it does not have a closing date. Therefore, if you decide not to close your trade by the end of the day, it will just roll over into the next trading session.

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

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

To learn more about Rolling Daily Markets please see Rolling Daily Spread Betting.

Glencore Rolling Daily Shares Trading Example

Now, if you consider the spread of 469.5p – 470.5p and assume:

• you have analysed the markets, and
• you feel that the Glencore share price looks like it will rise higher than 470.5p

then you could choose to buy at 470.5p and risk £5 per penny.

So, you gain £5 for every penny that the Glencore shares go above 470.5p. However, such a bet also means that you will lose £5 for every penny that the Glencore market goes below 470.5p.

Thinking of this in a slightly different way, should you buy a spread bet then your profits (or losses) are found 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 sessions the share price started to move upwards then you could choose to close your trade so that you can secure your profit.

So if the market increased then the spread, set by the spread trading firm, might move up to 487.0p – 488.0p. You would close/settle your spread bet by selling at 487.0p. So, with the same £5 stake this trade would result in a profit of:

Your P&L = (Final Level – Initial Level) x stake
Your P&L = (487.0p – 470.5p) x £5 per penny stake
Your P&L = 16.5p x £5 per penny stake
Your P&L = £82.50 profit

Speculating on shares, whether by spread betting or otherwise, may not go to plan. In this case, you wanted the share price to go up. Naturally, it could go down.

If the Glencore stock decreased, contrary to your expectations, then you might choose to close your position in order to restrict your losses.

So if the spread dropped to 451.7p – 452.7p then this means you would close your position by selling at 451.7p. That would mean you would lose:

Your P&L = (Final Level – Initial Level) x stake
Your P&L = (451.7p – 470.5p) x £5 per penny stake
Your P&L = -18.8p x £5 per penny stake
Your P&L = -£94.00 loss

Note – Glencore Rolling Daily market taken as of 03-Feb-12.

Glencore Spread Betting – More Details

For more information on trading Glencore, also see Glencore 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 Shanks?

You can spread bet on Shanks 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 Shanks

If you are looking to speculate on firms like Shanks then one option could be spread trading on the Shanks share price.

Looking at the InterTrader spread betting website, as of Friday, they were showing the Shanks Rolling Daily market at 111.2p – 111.9p. This means you could spread bet on the Shanks shares:

• Rising higher than 111.9p, or
• Falling lower than 111.2p

When spread trading on FTSE 350 equities you trade in £x per penny. As a result, if you decided to invest £10 per penny and the Shanks share price moves 5p then that would alter your profit/loss by £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 it does not have a set closing date. If your position is still open at the end of the day, it simply rolls over to the next session.

Should your bet roll over, if you are speculating that the market will:

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

You can learn more about Rolling Daily Markets in our article Rolling Daily Spread Betting.

Shanks Rolling Daily Equities Spread Trading Example

If we consider the above spread of 111.2p – 111.9p and assume:

• you have analysed the markets, and
• you think that the Shanks share price looks like it will rise higher than 111.9p

then you could buy at 111.9p and invest, for example, £15 per penny.

This means that you make a profit of £15 for every penny that the Shanks shares move above 111.9p. Conversely, however, you will make a loss of £15 for every penny that the Shanks market goes below 111.9p.

Considering this from another angle, should you ‘Buy’ a spread bet then your profit/loss is found by taking the difference between the closing price of the market and the initial price you bought the market at. You then multiply that price difference by the stake.

With this in mind, if after a few sessions the shares moved higher then you might want to close your position so that you can guarantee your profit.

As an example, if the market increased then the spread, set by the spread betting company, could change to 118.6p – 119.3p. To close your position you would sell at 118.6p. So, with the same £15 stake you would make:

Your profits (or losses) = (Settlement Price – Opening Price) x stake
Your profits (or losses) = (118.6p – 111.9p) x £15 per penny stake
Your profits (or losses) = 6.7p x £15 per penny stake
Your profits (or losses) = £100.50 profit

Speculating on equities, by spread trading or otherwise, is not easy. In this case, you wanted the share price to go up. Of course, the share price might fall.

If the Shanks share price had started to fall then you could choose to close your position in order to limit your losses.

So if the market dropped to 106.3p – 107.0p then you would close your position by selling at 106.3p. That would mean you would make a loss of:

Your profits (or losses) = (Settlement Price – Opening Price) x stake
Your profits (or losses) = (106.3p – 111.9p) x £15 per penny stake
Your profits (or losses) = -5.6p x £15 per penny stake
Your profits (or losses) = -£84.00 loss

Note: Shanks Rolling Daily market correct as of 03-Feb-12.

Shanks Spread Betting – More Details

For more information on trading Shanks, also see Shanks 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.