Where to Spread Bet on Tesco Shares?

You can spread bet on Tesco 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 Tesco Shares

If an investor wants to speculate on companies such as Tesco then one solution could be spread betting on the Tesco share price.

If an investor was to look at the Tradefair trading site, as of Friday, they were showing the Tesco Rolling Daily market at 315.4p – 315.9p. This means you could spread trade on the Tesco share price:

• Moving higher than 315.9p, or
• Moving lower than 315.4p

Whilst financial spread betting on FTSE 350 equities you trade in £x per penny. Therefore, if your stake was £15 per penny and the Tesco share price moves 5p then that would change your profit/loss by £75. £15 per penny x 5p = £75.

Rolling Daily Shares Markets

This is a Rolling Daily Market which means that there is no predetermined settlement date for this market. If your trade is still open at the end of the trading day, it will stay open and roll over into the next day.

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

• Increase – then you will pay a small overnight financing fee, or
• Decrease – then you will often receive a small payment to your account

To learn more please read Rolling Daily Spread Betting.

Tesco Rolling Daily Equities Spread Betting Example

If we consider the spread of 315.4p – 315.9p and make the assumptions:

• you have analysed the equities market, and
• you feel that the Tesco share price is likely to go higher than 315.9p

then you could choose to buy at 315.9p and risk, let’s say, £10 per penny.

So, you gain £10 for every penny that the Tesco shares push above 315.9p. On the other hand, it also means you will make a loss of £10 for every penny that the Tesco market moves lower than 315.9p.

Put another way, should you ‘Buy’ a spread bet then your profit/loss is worked out by taking the difference between the closing price of the market and the initial price you bought the market at. You then multiply that difference in price by your stake.

As a result, if after a few trading sessions the shares moved higher then you might want to close your position and therefore lock in your profits.

As an example, should the market rise, the spread could change to 326.2p – 326.7p. You would settle your position by selling at 326.2p. Therefore, with the same £10 stake you would calculate your profit as:

Profits (or losses) = (Closing Level – Initial Level) x stake
Profits (or losses) = (326.2p – 315.9p) x £10 per penny stake
Profits (or losses) = 10.3p x £10 per penny stake
Profits (or losses) = £103.00 profit

Speculating on equities, by spread betting or otherwise, is not always simple. In this example, you wanted the share price to increase. However, it might decrease.

If the Tesco stock decreased, contrary to your expectations, then you could close your position in order to restrict your losses.

Should the market fall back to 304.1p – 304.6p you would close your spread bet by selling at 304.1p. If so, this would result in a loss of:

Profits (or losses) = (Closing Level – Initial Level) x stake
Profits (or losses) = (304.1p – 315.9p) x £10 per penny stake
Profits (or losses) = -11.8p x £10 per penny stake
Profits (or losses) = -£118.00 loss

Note – Tesco Rolling Daily spread correct as of 13-Jan-12.

Tesco Spread Betting – More Details

For more information on trading Tesco, also see Tesco 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.