Spread Betting on Technology Stocks
Spread Betting on Technology Stocks
Less than a week after the launch of its high profile IPO, social networking giant, Facebook, has landed itself in hot water over allegations that the company issued a 'false and misleading' prospectus ahead of its IPO launch last Friday.
Below, we discuss how Facebook has failed to live up to expectations and how you can spread bet on their share price with Finspreads.
Spread Betting on Technology Stocks – Facebook’s Failed IPO
Facebook's larger than life debut witnessed a buyer frenzy of sorts, with investors fearing that a new technology bubble - version 2.0 - may be in the making.
The company has failed to dazzle, however, with Facebook shares sliding by around 18% on Tuesday from its IPO price of $38 to $31.
Technology bellwether Dell has shared some of this pain after the company's stocks tumbled 17% on Wednesday, May 23, after posting poorer-than-expected fiscal Q1 profits.
The heavyweight stock has dragged down others with it, with Intel Corp and Microsoft racking up falls of between 2.18 % and 2.27% respectively on the same day.
Spread Betting on Technology Stocks - A false bubble?
Facebook's dismal performance may have left many bitterly disappointed, but the stock offered fresh investors hope after the company's share price scuppered two straight days of falls to close up 3.2% at $32 per share on Wednesday.
The recent rough and tumble in the technology sector begs the question: have technology stocks been building themselves up in a false bubble, or is the sector simply pausing for breath before it resumes its rally higher?
Spread Betting on Technology Stocks
Traders keen to make a buck from rapidly changing prices can spread bet the technology sector with a Finspreads account.
Spread betting is an alternative to conventional shares dealing which enables you to profit irrespective of whether stock prices are moving up or down.
With spread betting, traders can net tax-free profits* from fluctuating stock price movements of over 12,000 financial instruments including shares, indices, currencies, commodities and metals.
Spread Betting on Technology Stocks - Example
To net a profit, you simply need to apply and open an account with a spread betting provider such as Finspreads, and determine whether you expect the price of your chosen instrument (let's say Dell shares for example) will rise or fall in the coming days.
If for instance, based on its recent dismal report, you expect Dell shares to continue falling lower, you take a short spread betting position on Dell shares.
Alternatively if you believe that the current pessimism surrounding technology stocks is short-lived and that Dell shares will climb higher in the days to come, you go long (or buy) Dell shares.
If you were right and prices move in the direction you had expected, you net a profit. If not, you make a loss.
Spread Betting on Technology Stocks - Summary
Spread betting offers numerous advantages over conventional shares dealing and is especially beneficial during volatile market conditions.
Finspreads Account / Website
Spread trading carries a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.
Article provided / approved by Finspreads which is a trading name of City Index Limited ('CI'), which is a spread trading and contracts for difference ('CFD') provider. CI is authorised and regulated by the Financial Services Authority, Firm Reference Number 113942.
iPhone is a trademark of Apple Inc. App Store is a service mark of Apple Inc.
'Spread Betting on Technology Stocks' edited by DB, updated 30-May-12
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