How to Spread Bet on Computacentre Shares
If you are going to invest in UK listed companies like Computacentre then one solution could be spread trading on the Computacentre share price.
By spread betting on Computacentre, investors can place a spread bet on the shares to either increase or decrease.
If an investor was to look at the Tradefair site, they are valuing the Computacentre (March) market at 262.1p - 265.5p. As a result, an investor can spread bet on the Computacentre share price closing:
- above 265.5p, or
- below 262.1p
On the expiry date for this 'March' market, 16-Mar-10.
Whilst financial spread betting on UK equities you trade in £x per penny. So, should you choose to risk £30 per penny and the Computacentre shares move 4p then there would be a difference to your P&L of £120. £30 per penny x 4p = £120.
Computacentre Equities Trading Example
Now, if we consider the above spread of 262.1p - 265.5p and assume:
- you have done your market research, and
- you think that the Computacentre share price is likely to settle higher than 265.5p on 16-Mar-10
So, you could choose to buy a spread bet at 265.5p for a stake of £15 per penny.
So, you make a profit of £15 for every penny that the Computacentre shares finish above 265.5p. On the other hand, it also means you will lose £15 for every penny that the Computacentre shares close below 265.5p.
Looking at 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 difference in price by the stake.
Subsequently, if, on the closing date, the Computacentre share price closes at 271.2p, then:
Profits (or losses) = (Final Level - Initial Level) x stake
Profits (or losses) = (271.2p - 265.5p) x £15 per penny stake
Profits (or losses) = 5.7p x £15 per penny stake
Profits (or losses) = £85.50 profit
Speculating on shares, whether by spread betting or otherwise, is not easy. In this example, you had bet that the share price would rise. Nevertheless, the share price might go down.
If the Computacentre stock fell, closing lower at 260.2p, then this means you would end up losing this spread bet.
Profits (or losses) = (Final Level - Initial Level) x stake
Profits (or losses) = (260.2p - 265.5p) x £15 per penny stake
Profits (or losses) = -5.3p x £15 per penny stake
Profits (or losses) = -£79.50 loss
Note: Computacentre equities market taken as of 04-Dec-09.
If you want to access live spread betting markets then you generally need to open an account with a spread betting company. Note that accounts are subject to status.
The spread betting companies listed on this site do not charge a fee to apply for an account.
If your application is approved then you can log on to their website and access their Live Prices and charts. There is no charge for looking at their prices.
The catch? You'll get the odd email or letter from them. The companies below also offer clients access to candlestick charts.
Of course, if you do trade then you should note that spread betting carries a high level of risk to your capital and you could lose more than your initial investment.
Live prices are available for account holders at:
Risk Warning: 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.
For related pages also see:
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