Where to Spread Bet on Ocado Shares?

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

• Financial Spread
• Tradefair
• IG Index

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

Spread Betting on Ocado Shares

If an investor is looking to invest in UK companies like Ocado then one option could be to spread bet on the Ocado share price.

Looking at the Capitalspreads spread betting site, as of Friday, they were showing the Ocado Rolling Daily market at 69.9p – 70.6p. As a result, you can spread bet on the Ocado share price:

• Moving above 70.6p, or
• Moving below 69.9p

When financial spread betting on FTSE 350 equities you trade in £x per penny. So, should you decide to risk £10 per penny and the Ocado share price moves 5p then there would be a difference to your bottom line of £50. £10 per penny x 5p = £50.

Rolling Daily Shares Markets

Note that this is a Rolling Daily Market and therefore there is no settlement date for this market. If a trade is still open when the markets close at the end of the day, it will simply roll over to the next trading day.

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

• Rise – then you will be charged a small overnight financing fee, or
• Fall – then a small payment is often credited to your account

To see a fully worked example read Rolling Daily Spread Betting.

Ocado Rolling Daily Equities Spread Betting Example

If you think about the above spread of 69.9p – 70.6p and assume:

• you have analysed the markets, and
• you think that the Ocado share price will go above 70.6p

then you might decide that you want to buy a spread bet at 70.6p and invest, let’s say, £15 per penny.

With such a spread bet you make a profit of £15 for every penny that the Ocado shares move higher than 70.6p. Nevertheless, such a bet also means that you will lose £15 for every penny that the Ocado market moves lower than 70.6p.

Considering this from another angle, if you buy a spread bet then your P&L is 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.

With this in mind, if after a few days the share price started to increase then you might want to close your spread bet in order to lock in your profit.

So if the market rose then the spread, set by the spread trading company, might change to 76.2p – 76.9p. You would close your position by selling at 76.2p. As a result, with the same £15 stake:

Profit / loss = (Closing Price – Opening Price) x stake
Profit / loss = (76.2p – 70.6p) x £15 per penny stake
Profit / loss = 5.6p x £15 per penny stake
Profit / loss = £84.00 profit

Trading equities, whether by spread trading or otherwise, is not easy. In this case, you had bet that the share price would rise. Nevertheless, the share price could go down.

If the Ocado shares decreased, contrary to your expectations, then you might choose to close your trade in order to limit your losses.

Should the spread drop to 65.9p – 66.6p you would settle your spread bet by selling at 65.9p. Accordingly, your loss would be:

Profit / loss = (Closing Price – Opening Price) x stake
Profit / loss = (65.9p – 70.6p) x £15 per penny stake
Profit / loss = -4.7p x £15 per penny stake
Profit / loss = -£70.50 loss

Note: Ocado Rolling Daily spread betting price correct as of 13-Jan-12.

Ocado Spread Betting – More Details

For more information on trading Ocado, also see Ocado 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.