Where to Spread Bet on Sports Direct?

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

• Financial Spreads
• Tradefair
• IGIndex

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

Spread Betting on Sports Direct

If you want to speculate on firms like Sports Direct then one option could be spread trading on the Sports Direct share price.

If you were to look at the capital spreads website, as of Friday, they were showing the Sports Direct Rolling Daily market at 284.7p – 287.0p. Therefore, you can spread trade on the Sports Direct shares:

• Going above 287.0p, or
• Going below 284.7p

Whilst spread betting on UK equities you trade in £x per penny. As a result, if you choose to invest £20 per penny and the Sports Direct shares move 5p then that would make a difference to your profits (or losses) of £100. £20 per penny x 5p = £100.

Rolling Daily Shares Markets

This is a Rolling Daily Market which means that there is no preset settlement date for this market. You do not have to close your trade, should it still be open at the end of the trading day, it simply rolls over to the next trading day.

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

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

For a fully worked example see Rolling Daily Spread Betting.

Sports Direct Rolling Daily Equities Spread Trading Example

Now, if you think about the above spread of 284.7p – 287.0p and make the assumptions:

• you have done your analysis, and
• you think that the Sports Direct shares will move above 287.0p

then you may choose to buy a spread bet at 287.0p for a stake of, for the sake of argument, £10 per penny.

So, you gain £10 for every penny that the Sports Direct shares increase and go higher than 287.0p. Conversely, however, you will make a loss of £10 for every penny that the Sports Direct market falls lower than 287.0p.

Looking at this from another angle, should you buy a spread bet then your profits (or losses) are calculated by taking the difference between the settlement price of the market and the initial price you bought the market at. You then multiply that price difference by the stake.

As a result, if the shares started to increase then you might want to close your position and therefore guarantee your profits.

So if the market increased then the spread, determined by the spread betting company, might change to 297.3p – 299.6p. To close your trade you would sell at 297.3p. As a result, with the same £10 stake your profit would be calculated as:

Profit / loss = (Final Level – Initial Level) x stake
Profit / loss = (297.3p – 287.0p) x £10 per penny stake
Profit / loss = 10.3p x £10 per penny stake
Profit / loss = £103.00 profit

Trading shares, whether by spread betting or not, doesn’t always work out as you would have liked. In this example, you wanted the share price to increase. However, the share price can also go down.

If the Sports Direct stock dropped then you might decide to settle/close your position in order to limit your losses.

Should the market drop to 275.2p – 277.5p then this means you would settle/close your trade by selling at 275.2p. Accordingly, your loss would be:

Profit / loss = (Final Level – Initial Level) x stake
Profit / loss = (275.2p – 287.0p) x £10 per penny stake
Profit / loss = -11.8p x £10 per penny stake
Profit / loss = -£118.00 loss

Note: Sports Direct Rolling Daily spread accurate as of 17-Feb-12.

Sports Direct Spread Betting – More Details

For more information on trading Sports Direct, also see Sports Direct 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.