Clean Financial readers should note that you might be able to spread bet on Facebook on other platforms.
Where Can I Find Live Spread Betting Prices and Charts for Facebook?
The following CFD trading chart will give you a handy guide to the Facebook share price.
The Plus500 chart above usually shows the near-term Facebook futures contract (not the spot market).
To study spread trading charts and the current prices for Facebook, you might need a spread betting account.
This would also let you access shorter term spot prices. Note: Opening such an account is subject to status, suitability and credit checks.
If your account application is approved, you will be able to log on and check the live trading prices and charts. On most platforms, these will be provided for free. Having said that, you might get the odd call and/or email from the spread trading firm.
Of course, if you want to trade, be aware that spread betting and CFDs involve a high degree of risk to your capital and can result in you losing more than your initial investment.
Ahead of the latest round of results, IG considers what traders should look out for when the social media giant announces its figures.
$100 Facebook Shares?
Yes, FB looks like it's been a little naughty and conducted a psychological study on its users without their consent but what about the share price?
The shareholders are certainly not cashing in just yet.
The stock has seen a steady climb since it was stuck around the $25/26 area in July 2013. The share price is currently trading around the $80 mark.
The video below takes a quick look at whether we'll hitting the $100 level.
Update by Chris Beauchamp, Market Analyst,
[3:51pm] Virtual Reality Facebook?
Facebook shares fell over 1.5% today after yesterday's announcement after the close it will purchase virtual reality hardware company Oculus for $3bn including $400m in cash and the rest in Facebook shares.
Virtual reality has been around a long time and it is a very speculative move by CEO Mark Zuckerberg to think that it will be the next thing in social media.
That said, video gaming where the hardware is mostly used is a huge industry, much bigger by revenue, than Hollywood and has a lot of potential for the placement of Facebook's ads.
Update by Jasper Lawler, Market Analyst,
Facebook Foots a Large Bill for WhatsApp
It is true, I have been wrong in the past.
I thought that Google overpaid when it bought YouTube for $1.65bn in 2006. That now looks like a shrewd piece of business.
When Facebook bought Instagram for $1bn, I also thought that was toppy.
However, Facebook have now agreed to buy WhatsApp, the messaging service for $19bn.
Is there any way of putting the valuation into perspective? I am not so sure.
Having said that, and it's far from a direct comparison, when Twitter IPO'd it had 218m monthly users sending up to 500m tweets per day.
WhatsApp has 450m monthly active users sending 19bn messages per day
The Twitter stock hit $49.90 on its first day of trading and therefore a valuation of $26bn. Nearly 4 months on from the IPO, Twitter is valued at a little over $30bn.
They actually IPO'd at $38 on 18 May 2012, valuing the firm at $104bn.
The stock then sunk to a low of $17.58 on 4 Sep 2012. Attached to this large fall were fears over how many 'real' users the network had, how to grow in a potentially saturated market, increasing use of Facebook via mobile phones (and therefore less ad space = lower revenues) and how to successfully monetise all those users.
After the stock hit $17.58 there was a period of relative stability, with the odd peak and trough, and the shares slowly made their way to about $26.50.
Whilst Facebook made inroads into making it more difficult to create fake accounts, the US company primarily answered its critics by improving the monetisation of its mobile users.
As feared, the number of people accessing Facebook via mobile and tablets increased by 51% to 819m, year-on-year. However, the social network proved that they could monetise mobile users as mobile ad sales accounted for 41% of Facebook's total ad revenue.
At the same time, active monthly users increased, 21% year-on-year, to 1.15bn. All this good news caused the shares to spike $7 to around $34.50.
The shares then climbed further and hit the $40 mark on 28 Aug 2013.
Yesterday, 24 Sep 2013, Citigroup upgraded the stock to "buy" from "neutral" and the shares hit their all-time high at $49.66.
Looking at the Facebook share price on the NASDAQ, the stock is currently trading around $49.26, a little lower that yesterday but still putting Facebook's value at about $120bn.
Facebook 10 Minute Chart
Facebook 1 Week Chart
Update by Gordon Childs, Editor,
Facebook Broker Upgrade to 'Buy'
Citigroup have upgraded the Facebook stock to 'Buy' from 'Neutral'.
Update by Jenna Cutly, Editor,
Positive Q2 2012 Results for Facebook
Facebook have released some rather positive results for Q2.
Facebook shares reached another new low yesterday, declining 6.2%.
Investors continued to fret over its last week's earnings report that showed a deceleration in user growth. Also, the company issued no guidance.
Current Facebook Owners Retain 96% of Votes
No economic news is scheduled for today, but all eyes will be on the eagerly anticipated Facebook flotation, due to take place this afternoon.
Despite continuing questions about the firm's ability to generate profit, the shares are in high demand and being valued at around $38.
This would make the 8 year old firm worth over $100bn and represents one of the highest valued US share IPOs in history.
However, the new shareholders will not have much of a say in how the company is run...the current owners will retain 96% of the voting power.
The Day Before the IPO
Just a couple of days before launching its IPO on the Nasdaq index, Facebook revised its price target to $34-$38 per share. This was up significantly from its earlier $28-$35 price target.
The rise came on the back of strong investor demand and left traders waiting with bated breath to find out whether Facebook shares will rise higher or plateau in the days following the IPO launch on Friday.
Facebook prices its shares today, May 17, and begins trading on Friday May 18.
The social network, owned by Mark Zuckerburg, is currently valued at between $93bn and $104bn.
Spread Betting on the Facebook IPO
After the floating of LinkedIn and Groupon, bankers and analysts have been optimistic about the performance of the imminent Facebook IPO.
Spread betting firm, Spreadex, is offering a market that lets investors spread bet on the percentage change of Facebook's shares on its first day of trading.
Spreadex spokesman Andy MacKenzie said: "This is already a popular market with a heavy bias of buyers pushing our spread up from 50%-55% to 60%-65%.
"Clients are expecting Facebook to follow in the footsteps of LinkedIn which floated at $45 but closed the first day up 109% at $94.25.
"Investors should be wise to remember other floats though. Groupon closed its first day up 31% closing at $26.11 after it floated at $20. Zygna was actually down 5% on its first day, closing at $9.50 after floating at $10."
'Facebook IPO Share Price Market'
Financial spread betting normally lets investors take a position on the monetary value of a company's share price and therefore try and profit from either a rise or fall in the value of the stock.
The new Facebook market is based purely on the percentage change from the IPO price to the closing price on its first day on the open market.
Having said that, once the IPO is complete, a normal financial spread betting market on the price of Facebook shares will be available on the Spreadex website.
Trading the the Facebook IPO
Spread betting on the 'Facebook First Day of Trading Percentage Change' market:
Facebook Buy Example:
Let's say that you think the Facebook shares will soar and buy at 65%
Demand for the social network's share is bigger than Bono's bank balance and they close the day up 86%
You make a profit of 21 times your stake, 86% - 65% = 21%
However, should Facebook close the day 25% up you would lose 40 times your stake, 25% - 65% = -40%
Facebook Sell Example:
Let's say you don't believe the hype and you sell at 60%
Your pessimism may be well founded, let's say the shares finish the day friendless and down 6% from the IPO price
In this case you would make a profit of 66 times your stake, 60% - (- 6%) = 66%
If shares closed up 86% as per the above example, you would lose 26 times your stake, 60% - 86% = -26%
Will We See Facebook Flop When it IPOs?
The market has seen the anticipated IPO of Facebook gather momentum and the debate is raging as to whether it'll be a Google type float or a flop.
Until we know more about exactly what price they're looking to float at it's a tricky one to evaluate.
Advertising revenue from social media sites still remains largely untested and hasn't quite established itself yet.
The big names are yet to have ramped build big advertising campaigns for the likes of Facebook, so for now it looks like a bit of a punt on whether this potential will be realised in the next couple of years.
But with 850m users there are plenty of attractions and many people will be eager not to miss the party when the float does happen.
Each of the firms listed above currently offer a Demo Account that lets users apply a variety of trading orders, try out new trading theories and access professional level charts, such as bar and candlestick charts.
How to Spread Bet on Facebook?
If an investor decides to invest in firms like Facebook then one option could be to place a spread bet on the Facebook share price.
Looking at a site like Selftrade Markets, you can see they are currently showing the Facebook Rolling Daily market at $28.93 - $28.98. Therefore, an investor can spread trade on the Facebook share price:
Going above $28.98, or
Going below $28.93
When spread betting on S&P 500 equities you trade in £x per cent. As a result, if you chose to have a stake of £4 per cent and the Facebook shares move $0.32 then that would alter your profits (or losses) by £128. £4 per cent x $0.32 = £128.
Note that you are also able to spread bet on this market in Dollars or Euros, e.g. €x per cent.
Rolling Daily Equities Markets
You should note that this is a Rolling Daily Market which means that in contrast with futures markets, there is no settlement date. If a trade is still open when the markets close at the end of the day, it just rolls over into the next session.
If you do roll over a trade and you are spread betting that the market will:
Rise - then you will pay a small overnight financing fee, or
Fall - then you will usually receive a small credit to your account
Facebook Rolling Daily - US Shares Trading Example
So, if you continue with the above spread of $28.93 - $28.98 and make the assumptions that:
You have done your stock market research, and
Your research leads you to think the Facebook share price is likely to go higher than $28.98
Then you might decide to buy a spread bet at $28.98 and risk, for example, £4 per cent.
With such a spread bet you make a profit of £4 for every cent that the Facebook shares increase and go above $28.98. Nevertheless, you will lose £4 for every cent that the Facebook market falls below $28.98.
Looking at this from another angle, should you ‘Buy’ a spread bet then your P&L is calculated by taking the difference between the settlement price of the market and the price you bought the market at. You then multiply that price difference by the stake.
If after a few days the share price moved higher then you might want to close your trade to lock in your profit.
So if the market moved up then the spread, determined by the spread betting company, might change to $29.39 - $29.44. In order to close/settle your position you would sell at $29.39. As a result, with the same £4 stake this trade would make you a profit of:
Profit / loss = (Settlement Price - Initial Price) x stake
Profit / loss = ($29.39 - $28.98) x £4 per cent stake
Profit / loss = $0.41 x £4 per cent stake
Profit / loss = 41¢ x £4 per cent stake
Profit / loss = £164 profit
Trading equities, whether by spread betting or otherwise, is not always simple. In the above example, you wanted the share price to increase. Naturally, the share price could decrease.
If the Facebook shares decreased, contrary to your expectations, then you might decide to close/settle your spread bet to limit your losses.
So if the spread dropped to $28.61 - $28.66 then this means you would sell back your position at $28.61. If so, that would mean you would lose:
Profit / loss = (Settlement Price - Initial Price) x stake
Profit / loss = ($28.61 - $28.98) x £4 per cent stake
Profit / loss = -$0.37 x £4 per cent stake
Profit / loss = -37¢ x £4 per cent stake
Profit / loss = -£148 loss
Note - Facebook Rolling Daily spread betting price taken as of 06-Feb-13.
'Facebook Spread Betting' edited by DB, updated 03-Oct-17
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