Category — Spread Betting Offer

The FTSE moves lower by 11 at 5934, as $45bn doesn’t buy what it used to.

So the Fed gave us the details of QE4, and the immediate effect on the shares spread betting markets is proving what we have long feared – that the returns are diminishing with each new stimulus.

Changes in targets used for setting interest rates were the surprise, introducing the ‘Evans rule’ of the eponymous Chicago Federal Reserve chief and remaining low for as long as unemployment is above the set figure of 6.5%.

What will be interesting for UK economic watchers, is whether this additional target will affect incoming Bank of England head Mark Carney’s reported proposals that the Bank of England use figures other than inflation when setting the UK’s rates.

Down on the high street, it is a tale of two retailers today. Iconic high street retailer, HMV, continues to struggle to avoid being consigned to the history books, reporting falling sales, further losses, and the probable breach of banking covenants in January.

Investors have come to the aid of many retailers throughout the downturn, but I wonder how long they can keep propping up a company that continues to struggle against the inevitable trend towards online retail.

The other side of this story is SportsDirect, whose shares have seen profit-taking (-3.5%) after yesterday’s trading came close to October’s all-time high.

A record first half has been credited to the London Olympics, and SportsDirect is expecting to comfortably meet its full-year targets.

Retail investors have marvelled for many years at the staff loyalty that John Lewis’ co-operative model inspires, and perhaps SportsDirect – as a listed company with a respectable bonus scheme which has undoubtedly helped motivate performance – is close to matching this.

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 Alastair McCaig, 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 marginally lower, down five points, after Greek talks broke down yet again last night.

Having stood their ground yesterday, financial spread betting markets are shakier this morning. Eurozone ministers once again failed to throw a deal together, as talks over the latest rescue plan for Athens fell apart.

You might have thought that three years would be enough time to solve this crisis, but no, they have said they need more time to hammer out the details. The next attempt begins in six days, so we will just have to be patient for now.

Minutes from the Bank of England provided little excitement, with only one member pressing for a boost to the current QE programme.

In corporate news, platinum miner, Johnson Matthey, had a difficult first half, as sales dropped, and it sees no respite in the second half of the year either.

However, caterer, Compass, is looking forward to another good year after making more than £1 billion in underlying pre-tax profits.

Last night in the US Fed chairman, Ben Bernanke made a suitably doom-laden speech, saying that even a last-minute solution would be damaging due to its negative effect on market confidence. It is a warning that all should heed.

US jobless claims and the Michigan confidence index will both appear earlier in the week than is usual, due to the Thanksgiving holiday tomorrow, and we expect US markets to open relatively unchanged 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 Alastair McCaig, 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.

Where to Spread Bet on Kentz?

You can spread bet on Kentz 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 Kentz

Should you want to speculate on UK companies such as Kentz then one possibility could be to spread trade on the Kentz share price.

Looking at the capital spreads website, as of Friday, they were showing the Kentz Rolling Daily market at 367.5p – 370.5p. As a result, you can spread bet on the Kentz shares:

• Moving higher than 370.5p, or
• Moving lower than 367.5p

Whilst spread betting on FTSE 350 equities you trade in £x per penny. As a result, should you choose to risk £10 per penny and the Kentz share price moves 5p then that would alter your bottom line by £50. £10 per penny x 5p = £50.

Rolling Daily Equities Markets

You should note that this is a ‘Rolling Daily Market’, therefore it does not have a closing date. As a result, if your trade is still open at the end of the trading day, it just rolls over into the next session.

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

• Go up – then you will usually be charged a small overnight financing fee, or
• Go down – then a small payment will usually be credited to your account

If you would like a fully worked example then see Rolling Daily Spread Betting.

Kentz Rolling Daily Shares Trading Example

If we think about the spread of 367.5p – 370.5p and assume that:

• you have done your research, and
• you feel that the Kentz share price looks like it will rise higher than 370.5p

then you may decide that you are going to go long of the market at 370.5p for a stake of, let’s say, £5 per penny.

This means that you win £5 for every penny that the Kentz shares push above 370.5p. On the other hand, such a bet also means you will make a loss of £5 for every penny that the Kentz market falls lower than 370.5p.

Thinking of this in a slightly different way, if you were to 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 spread at. You then multiply that price difference by your stake.

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

So if the spread betting market moved up then the spread, determined by the spread betting company, might change to 390.9p – 393.9p. You would close your position by selling at 390.9p. So, with the same £5 stake your profit would be:

Your P&L = (Settlement Price – Opening Price) x stake
Your P&L = (390.9p – 370.5p) x £5 per penny stake
Your P&L = 20.4p x £5 per penny stake
Your P&L = £102.00 profit

Trading shares, by spread betting or otherwise, is not simple. With this example, you had bet that the share price would rise. Naturally, the share price might decrease.

If the Kentz stock fell then you might choose to close your spread bet to stop any further losses.

Should the market drop to 352.9p – 355.9p then this means you would settle your spread bet by selling at 352.9p. That would mean you would lose:

Your P&L = (Settlement Price – Opening Price) x stake
Your P&L = (352.9p – 370.5p) x £5 per penny stake
Your P&L = -17.6p x £5 per penny stake
Your P&L = -£88.00 loss

Note – Kentz Rolling Daily spread quoted as of 24-Aug-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.

Where to Spread Bet on Evraz?

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

• Financial Spreads
• IG Index
• InterTrader

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

Spread Betting on Evraz

If an investor is looking to invest in UK listed companies such as Evraz then one possibility could be to place a spread bet on the Evraz share price.

If you were to look at the Capital Spreads website, as of Friday, they were showing the Evraz Rolling Daily market at 270.0p – 271.0p. As a result, you could spread trade on the Evraz share price:

• Rising above 271.0p, or
• Falling below 270.0p

Whilst financial spread trading on UK equities you trade in £x per penny. As a result, if you invest £20 per penny and the Evraz shares move 5p then that would alter your P&L by £100. £20 per penny x 5p = £100.

Rolling Daily Shares Markets

Note that this is a Rolling Daily Market and therefore unlike a futures market, there is no settlement date. If you decide to leave your trade open at the end of the day, it will roll over to the next session.

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

• Increase – then you will be charged a small overnight financing fee, or
• Decrease – then a small payment is normally credited to your account

Our article Rolling Daily Spread Betting goes into more detail about Rolling Daily Markets and includes a fully worked example.

Evraz Rolling Daily Shares Spread Trading Example

Now, if we think about the spread of 270.0p – 271.0p and assume that:

• you have analysed the markets, and
• you think that the Evraz share price is likely to increase and move above 271.0p

then you might choose to buy a spread bet at 271.0p and risk, for the sake of argument, £10 per penny.

So, you win £10 for every penny that the Evraz shares push higher than 271.0p. Having said that, such a bet also means that you will lose £10 for every penny that the Evraz market goes lower than 271.0p.

Thinking of this in a slightly different way, if you were to ‘Buy’ a spread bet then your P&L is calculated 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 shares moved higher then you might want to close your trade so that you can lock in your profit.

Taking this a step further, if the market rose then the spread, set by the spread trading firm, might move up to 280.9p – 281.9p. In order to close/settle your position you would sell at 280.9p. As a result, with the same £10 stake your profit would be:

Profit = (Final Price – Opening Price) x stake
Profit = (280.9p – 271.0p) x £10 per penny stake
Profit = 9.9p x £10 per penny stake
Profit = £99.00 profit

Speculating on equities, whether by spread betting or not, is not always easy. With this example, you wanted the share price to rise. Naturally, it can also fall.

If the Evraz share price had started to fall then you might choose to close your spread bet to stop any further losses.

So if the spread pulled back to 262.6p – 263.6p then this means you would settle your position by selling at 262.6p. Therefore, you would make a loss of:

Loss = (Final Price – Opening Price) x stake
Loss = (262.6p – 271.0p) x £10 per penny stake
Loss = -8.4p x £10 per penny stake
Loss = -£84.00 loss

Note: Evraz Rolling Daily spread betting price quoted as of 10-Aug-12.

Spread Betting Account Offers

If you are looking to open a spread betting account then for the latest spread betting offers please see Spread Betting Offers.

For a more detailed look at the spread betting markets, spread sizes and account services offered by a range of spread betting companies also see Spread Betting Account.

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 Aegis?

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

• Financial Spreads
• InterTrader
• IG Index

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

Spread Betting on Aegis

If you want to speculate on companies like Aegis then one possibility could be spread betting on the Aegis share price.

If you were to look at the FinancialSpreads spread trading site, as of Friday, they were showing the Aegis Rolling Daily market at 235.3p – 236.0p. As a result, you can spread trade on the Aegis shares:

• Going higher than 236.0p, or
• Going lower than 235.3p

When spread trading on FTSE 350 shares you trade in £x per penny. Therefore, if you decided to risk £30 per penny and the Aegis shares move 5p then that would be a difference to your P&L of £150. £30 per penny x 5p = £150.

Rolling Daily Shares Markets

This is a Rolling Daily Market which means that unlike a futures market, there is no settlement date. As a result, if your trade is still open at the end of the trading day, it just rolls over into the next session.

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.

Aegis Rolling Daily Equities Trading Example

So, if we consider the above spread of 235.3p – 236.0p and make the assumptions that:

• you have done your analysis, and
• you think that the Aegis shares will push above 236.0p

then you may decide that you are going to buy a spread bet at 236.0p for a stake of £15 per penny.

So, you make a profit of £15 for every penny that the Aegis shares rise higher than 236.0p. Nevertheless, such a bet also means that you will make a loss of £15 for every penny that the Aegis market goes below 236.0p.

Thinking of this in a slightly different way, if you buy a spread bet then your profit/loss is calculated by taking the difference between the final 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 trading sessions the share price started to increase then you might want to close your spread bet and therefore guarantee your profits.

So if the market increased then the spread, set by the spread betting company, might move up to 244.3p – 245.0p. To close your trade you would sell at 244.3p. Therefore, with the same £15 stake you would make a profit of:

Your profit / loss = (Settlement Price – Opening Price) x stake
Your profit / loss = (244.3p – 236.0p) x £15 per penny stake
Your profit / loss = 8.3p x £15 per penny stake
Your profit / loss = £124.50 profit

Financial spread trading is not easy. In this case, you wanted the share price to go up. Nevertheless, the share price might fall.

If the Aegis stock weakened, against your expectations, then you could choose to close your position in order to restrict your losses.

So if the spread betting market pulled back to 228.7p – 229.4p you would close your trade by selling at 228.7p. So your loss would be calculated as:

Your profit / loss = (Settlement Price – Opening Price) x stake
Your profit / loss = (228.7p – 236.0p) x £15 per penny stake
Your profit / loss = -7.3p x £15 per penny stake
Your profit / loss = -£109.50 loss

Note: Aegis Rolling Daily market taken as of 13-Jul-12.

Aegis Spread Betting – More Details

For more information on trading Aegis, also see Aegis 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.