Spread betting markets on World Shares may also be available through other companies. Notes.
Trading Charts?
Spread betting charts may also be available from other companies. Notes.
Sample Indian Shares Chart from Financial Spreads:
Axis Bank Spread Trading Example
If you decide to spread bet on Indian shares like Axis Bank then, looking at a spread betting website like Financial Spreads, you may see a spread of Rs. 1,014.08 - Rs. 1,018.97.
Therefore, you can spread bet on Axis Bank shares to move above Rs. 1,018.97 or below Rs. 1,014.08.
With spread betting, you trade on every unit the market goes up or down; in the case of the Axis Bank market a unit is 1 Rupee of the share's price movement.
For instance, you could decide to bet £2 for every Rupee that the Axis Bank share price increases or decreases.
Buying - Spread Betting on the Market to Rise
If you were to buy Axis Bank at Rs. 1,018.97 and the shares went up then the market might be re-priced at Rs. 1,059.73 - Rs. 1,064.62. If that were to happen, you could close your trade for a profit by selling at Rs. 1,059.73.
Profit or Loss = (settlement value of the market - opening value of the market) x stake per Rupee
Profit or Loss = (Rs. 1,059.73 - Rs. 1,018.97) x £2 per Rupee stake
Profit or Loss = Rs. 40.76 x £2 per Rupee
Profit or Loss = £81.52 profit
Of course, if the market had moved down to, for example, Rs. 980.76 - Rs. 985.65, you could choose to close your trade to restrict your losses. If that happened, you would sell the market at Rs. 980.76.
With the same £2 per Rupee stake:
Profit or Loss = (settlement value of the market - opening value of the market) x stake per Rupee
Profit or Loss = (Rs. 980.76 - Rs. 1,018.97) x £2 per Rupee stake
Profit or Loss = -Rs. 38.21 x £2 per Rupee
Profit or Loss = -£76.42 loss
One major benefit of placing a spread bet is that you can go short of the markets.
When we began this example, the spread betting price was Rs. 1,014.08 - Rs. 1,018.97.
If you were to sell Axis Bank at Rs. 1,014.08 and the shares decreased then the spread could move to Rs. 964.57 - Rs. 969.46. If so, you might choose to close your bet for a profit by buying at Rs. 969.46.
Profit or Loss = (opening value of the market - settlement value of the market) x stake per Rupee
Profit or Loss = (Rs. 1,014.08 - Rs. 969.46) x £2 per Rupee stake
Profit or Loss = Rs. 44.62 x £2 per Rupee
Profit or Loss = £89.24 profit
Markets can also rise, if the market had moved up to, for example, Rs. 1,051.02 - Rs. 1,055.91, you could choose to close your bet to restrict your losses. In that case, you would buy back at Rs. 1,055.91.
You would close your bet with the same £2 per Rupee stake:
Profit or Loss = (opening value of the market - settlement value of the market) x stake per Rupee
Profit or Loss = (Rs. 1,014.08 - Rs. 1,055.91) x £2 per Rupee stake
Profit or Loss = -Rs. 41.83 x £2 per Rupee
Profit or Loss = -£83.66 loss
Axis Bank Rolling Daily spread betting market quoted as of 28-Jan-10. You can also trade this market with Capital Spreads.
6) Where can I find more on Spread Betting on Shares?
Note - Spread Betting carries a high level of risk to your capital and you can lose more than your initial investment, it may not be suitable for all investors. Ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved and seek independent financial advice where necessary.
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Risk Warning - Spread betting carries a high level of risk to your capital & you may lose more than your initial investment. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved, seek financial advice where necessary & make sure spread betting meets your investment objectives.
The above information is correct at time of writing. The spreads quoted are for Rolling Daily markets and may vary out of hours. † Tax Law can change.
FinancialSpreads.com is a trading name of London Capital Group Ltd which is authorised & regulated by the Financial Services Authority (FSA). Registered address: is 4th Floor, 12 Appold Street, London EC2A 2AW. All information correct at time of publication.
Risk Warning:
Spread Betting carries a high level of risk
to your capital and you can lose more than your initial investment,
it may not be suitable for all investors. Ensure you only
speculate with money that you can afford to lose and that you fully
understand the risks involved and seek independent financial advice where necessary.
Disclaimer:
Online-Spread-Betting.com does not endorse the information and
analysis available on this site. It is provided purely for information
purposes and is delivered as a personal view of the writer. Under no circumstances
is the information hereon to be used or considered as, an offer to sell, or a
solicitation of any offer to buy. The website content does not constitute investment
advice and neither the individual contributor nor Online-Spread-Betting.com accepts any
responsibility for any use that may be made of the content.
* Tax Free Trading:
Tax law is subject to change. It may also differ if you pay tax in a jurisdiction outside the UK.
