Throughout the debt crisis, it has often been said that emerging markets would be the key to helping developed nations emerge from the gloom.

Today is a case in point with strong Chinese growth figures lifting markets this morning.

Chinese GDP came in at +8.9%, ahead of estimates with industrial production also coming in ahead of expectations.

Stock market futures have received an early boost with S&P 500 futures up 0.78%.

The biggest winners so far this morning are the commodity currencies, especially the Australian dollar who’s raw material exports are heavily reliant on Chinese growth.

The AUD/USD is up 1.05%, the highest level since November, with the NZD/USD touching 0.8000, above 0.80%.

The USD/CAD is following suit, extending the two day rally to approach the difficult support level at 1.0100.

The euro is lagging the Aussie, but is still showing solid gains so far with the EUR/USD up 0.70% and the EUR/GBP up 0.44% as the pound shows relative weakness compared to other pairs.

Gold is the biggest mover this morning though with the precious metal up over 1%.

Trading Today

After a dearth of data yesterday and indeed for much of last week, today we have a packed itinerary.

We start with UK inflation with CPI and RPI due at 09.30. Analysts expect inflation to finally drop to 4.2% and 4.7% respectively.

Bank of England governor King is speaking at 09.45.

German ZEW economic sentiment follows at 10.00 with European ZEW released at the same time. We also have Europe wide inflation data at 10.00.

At 14.00 we have the latest rate statement from the bank of Canada with no change expected.

AUD/USD Trading Idea

The AUD/USD received a much needed boost today with the stronger than expected Chinese data. The pair has certainly lost its shine that saw it rocket higher through 2009 to 2010, but it has been in an uptrend of sorts since Mid December.

The 1.0400 level has proven tricky in the past, but if it holds, there is clear sky until 1.0700.

A way to trade this might be a higher trade predicting that the AUD/USD closes above 1.045 in 7 days time for a potential return of 121%.

Editor’s note: If you lose a financial fixed odds trade you lose 100% of your stake.

The Markets Yesterday Afternoon

It was a day to forget on financial spread betting markets yesterday without the guiding hand of US markets or any notable headlines coming from the Eurozone.

The one exception was the USD/CAD which was down 0.54% as confidence in the Canadian economy improved.

US Stock markets were closed, but S&P 500 futures managed to put in a reasonable day rallying 0.20%.

 
Before trading with spread betting, CFDs or financial fixed odds ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved. These products may not be suitable for all investors, seek independent financial advice where necessary.

Note that spread betting and CFD trading carry a high level of risk to your capital and you can lose more than your initial investment.

The Financial Fixed Odds update by David Evans, Market Analyst, BetOnMarkets.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.
 

After a weekend of analysis following the downgrade of major European counties including France and Austria, the financial spread betting markets are predictably trading lower so far this morning.

Most currency pairs and stock market futures imply a ‘risk off’ mentality for the day. However, so far, the falls are mild. The EUR/USD is down just 0.10% as the dollar index pulls back from recent highs.

Other dollar pairs are seeing similar moves with the AUD/USD and NZD/USD bouncing off the lows to push back towards Friday’s close.

In forex spread betting, the main currency to highlight this morning is the Canadian dollar with USD/CAD down 0.38%, the top mover so far this morning.

After flirting with the ¥77.00 level in early trading, the USD/JPY is firmly back within its median trading range and down 0.17% on the day so far.

The yen’s strength pushing other pairs lower with the EUR/JPY hitting new lows ten year lows, down 0.24%.

Gold is pushing higher, testing the $1,650 level once again.

Trading Today

We have a light economic calendar today with lighter trading possible owing to the US bank holiday today.

The day’s main highlight is ECB president Draghi speaking at 18.00.

EUR/USD Trading Idea

The euro crisis has tended to follow a pattern of big headlines & falls followed by a brief period of respite when European leaders put out reassuringly headlines.

Markets then figure out that the reassurances are lacking substance and the whole cycle starts again.

After Friday’s big falls on the EUR/USD, there could be some short term respite as Europe’s leaders do their best to sooth markets. In addition, the EUR/USD has been a very good pull back currency over the last six months with big moves in either direction often followed by a retracement back in the opposite direction.

A way to play this might be a HIGHER trade predicting that the EUR/USD is higher than 1.2750 in 7 days time for a potential return of 170%.

Editor’s note: If you lose a financial fixed odds trade you lose 100% of your stake.

Also see spread betting on the EUR/USD.

The Markets on Friday Afternoon

After a week of tepid trading, volatility returned to financial markets in Friday afternoon as the eurozone crisis reared its ugly head once more.

France and Austria’s credit ratings were on the line as the Greek debt talks collapsed. Adding to the general negative tone, US trade balance numbers came in worse than expected.

The euro was being singled out on a generally negative day with the EUR/JPY hitting its lowest levels since 2000 and the EUR/USD dropping 1.20% on the day. The EUR/GBP was also trading lower despite UK PPI Input dropping 0.6%.

 
Before trading with spread betting, CFDs or financial fixed odds ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved. These products may not be suitable for all investors, seek independent financial advice where necessary.

Note that spread betting and CFD trading carry a high level of risk to your capital and you can lose more than your initial investment.

The Financial Fixed Odds update by David Evans, Market Analyst, BetOnMarkets.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.
 

Where to Spread Bet on Invensys

You can trade on spread betting markets such as Invensys with spread betting companies like:

• CapitalSpreads
• GFT
• CityIndex

To see which companies offer 24 hour trading, new account offers, stop losses and trading charts see Spread Betting Companies.

How to Spread Bet on Invensys

If you decide to spread trade on UK shares like Invensys then, looking at a spread trading website like Financial Spreads on Friday, you may have seen a spread of 179.5p – 180.3p.

This means you could bet on Invensys to go higher than 180.3p or to go lower than 179.5p.

With spread betting, you bet on every unit the market moves up or down; with the Invensys market a unit is 1p of the share’s price movement.

For this instance, you could decide to trade £15 for every penny Invensys rises or falls.

Spread Betting on the Market to Increase

If you bought Invensys at 180.3p and the shares increased then the spread might change to 186.6p – 187.4p. If this were the case, you might decide to close your spread trade at 186.6p.

Profit/Loss = (closing price of the market – initial price of the market) x stake per penny
Profit/Loss = (186.6p – 180.3p) x £15 per penny stake
Profit/Loss = 6.3p x £15 per penny
Profit/Loss = £94.50 profit

The markets can of course fall, if the market decreased to, for example, 174.9p – 175.7p, you may decide to close your trade to restrict your losses. If so, you would sell at 174.9p.

So, with the same £15 per penny stake:

Profit/Loss = (closing price of the market – initial price of the market) x stake per penny
Profit/Loss = (174.9p – 180.3p) x £15 per penny stake
Profit/Loss = -5.4p x £15 per penny
Profit/Loss = -£81.00 loss

Spread Betting on the Market to Decrease

One of the benefits of placing a spread bet is that you can short the markets.

At the start of the example, the spread was 179.5p – 180.3p.

If you were to sell Invensys at 179.5p and the shares decreased then the spread might change to 173.0p – 173.8p. If that happened, you might want to close your spread bet for a profit by buying at 173.8p.

Profit/Loss = (initial price of the market – closing price of the market) x stake per penny
Profit/Loss = (179.5p – 173.8p) x £15 per penny stake
Profit/Loss = 5.7p x £15 per penny
Profit/Loss = £85.50 profit

However, if the market were to rise up to 183.5p – 184.3p, you might want to close your bet to limit your losses. If that were to happen, you would buy your spread bet at 184.3p.

Therefore, with the same £15 per penny stake:

Profit/Loss = (initial price of the market – closing price of the market) x stake per penny
Profit/Loss = (179.5p – 184.3p) x £15 per penny stake
Profit/Loss = -4.8p x £15 per penny
Profit/Loss = -£72.00 loss

Invensys Rolling Daily prices accurate as of 13-Jan-12.

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.

Where to Spread Bet on SIG

You can trade on spread betting markets such as SIG with spread betting companies like:

• FinancialSpreads
• Spreadex
• CityIndex

To see which companies offer 24 hour trading, new account offers, stop losses and trading charts see Spread Betting Companies.

How to Spread Bet on SIG

If you are going to spread bet on UK shares such as SIG then, looking at a spread betting company’s website on Friday, you may have seen a spread of 100.8p – 101.6p.

That means you could spread trade on SIG to increase above 101.6p or decrease below 100.8p.

When you spread bet, you trade on every unit the market increases or decreases; specifically, for the SIG market a unit is 1p of the share’s price movement.

As an example, you could decide to bet £20 for every penny SIG increases or decreases.

Buying – Spread Betting on the Market to Go Up

If you bought SIG at 101.6p and the shares increased then the spread might change to 105.4p – 106.2p. If so, you might decide to close your spread bet at 105.4p.

Your P&L = (final level of the market – initial level of the market) x stake per penny
Your P&L = (105.4p – 101.6p) x £20 per penny stake
Your P&L = 3.8p x £20 per penny
Your P&L = £76.00 profit

Markets can also fall, if the market had decreased to, for example, 97.3p – 98.1p, you might want to close your spread bet to limit your losses. Assuming this was the case, you would sell the market at 97.3p.

You would close your bet with the same £20 per penny stake:

Your P&L = (final level of the market – initial level of the market) x stake per penny
Your P&L = (97.3p – 101.6p) x £20 per penny stake
Your P&L = -4.3p x £20 per penny
Your P&L = -£86.00 loss

Selling – Spread Betting on the Market to Go Down

One benefit of placing a spread trade is that investors can go short of the markets.

At the beginning of this example, the market was priced at 100.8p – 101.6p.

If you were to go short of SIG at 100.8p and the shares fell then the spread could move to 95.3p – 96.1p. If that happened, you might choose to close your trade for a profit at 96.1p.

Your P&L = (initial level of the market – final level of the market) x stake per penny
Your P&L = (100.8p – 96.1p) x £20 per penny stake
Your P&L = 4.7p x £20 per penny
Your P&L = £94.00 profit

Nevertheless, if the market had moved up to, for example, 105.4p – 106.2p, you might want to close your trade to limit your losses. If that were to happen, you would buy at 106.2p.

So, with the same £20 per penny stake:

Your P&L = (initial level of the market – final level of the market) x stake per penny
Your P&L = (100.8p – 106.2p) x £20 per penny stake
Your P&L = -5.4p x £20 per penny
Your P&L = -£108.00 loss

SIG Rolling Daily prices correct as of 13-Jan-12.

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.

Asian money has helped to extend yesterday’s rally that was fuelled in part by successful European bond auctions. This morning both the EUR/USD and GBP/USD are 0.40% higher, the biggest movement across currency pairs so far.

In financial spread betting, the morning move cannot quite be seen as an outright bullish signal yet. Yesterday brought welcome relief to Europe, but UK stocks have only managed to grind out the gains so far in 2012.

The USD/JPY continues to trade in an extremely tight trading range. The pair’s 14 day Average True Range has not reached levels not seen for decades, much to the frustration of many traders.

Trading Today

Coming up today we have UK PPI input and output at 09.30 with a slight drop expected.

From 13.30 we have Canadian and US trade balance figures with an increased US deficit on the cards.

Preliminary UoM Consumer Sentiment follows at 14.55 with an increase to 71.2 expected.

USD/JPY Trading Idea

The USD/JPY’s trading range contraction has reached such extreme levels, but the question is whether this is the start of a new mode for the pair, or an extreme point before the pair’s volatility rebounds.

With many speculating that this won’t happen until the Japanese New Year, there could be a continuation of the current impasse in the medium term.

The median price since August has been 76.94 which could be the basis of a low volatility trade.

An IN/OUT trade predicting that the USD/JPY closes between @yen;77.25 and @yen;76.60 in 21 days time could return 144% if successful.

Editor’s note: If you lose a financial fixed odds trade you lose 100% of your stake.

Also see USD/JPY spread betting.

The Markets Yesterday Afternoon

Successful Spanish and Hungarian bond auctions have boosted the euro yesterday, in a move that was largely against the general run of play. The EUR/USD was up around 1% with the EUR/GBP and EUR/JPY not far behind.

 
Before trading with spread betting, CFDs or financial fixed odds ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved. These products may not be suitable for all investors, seek independent financial advice where necessary.

Note that spread betting and CFD trading carry a high level of risk to your capital and you can lose more than your initial investment.

The Financial Fixed Odds update by David Evans, Market Analyst, BetOnMarkets.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.
 

Volatility has dropped for much of the week and this morning is no exception, with most FX spread betting pairs trading well within the extremes of their recent trading ranges.

The main exception is gold which is putting together a nice rally so far in 2012 and is up another 0.80% this morning.

The gains are small, but the NZD/USD looks to be testing yesterday’s high, while the AUD/JPY is up 0.15% thanks to the weakness seen in the Japanese yen so far this morning.

The euro is showing some relative strength against the pound, but the EUR/GBP remains range bound.

Trading Today

We’ve another data light day today with the main highlights being UK trade balance at 09.30 followed by the US beige book this evening at 19.00.

EUR/USD Fixed Odds Trading Idea

Volatility has dropped considerably this week with a dearth of top tier economic data on the cards so far.

This could present an opportunity though as volatility often rebounds following a quiet period such as this.

A way to trade this situation might be an IN/OUT trade looking for a breakout. This could be especially useful with a busy economic calendar tomorrow.

An IN/OUT trade predicting that the EUR/USD goes outside of either 1.2450 or 1.0350 in the next 7 days could return 126%. The pair has to touch either of these levels just once for the trade to return a profit.

Editor’s note: If you lose a fixed odds trade, you will lose 100% of your stake.

The Markets Yesterday Afternoon

Stock markets were enjoying a positive day yesterday with the benchmark S&P 500 index hitting its highest level since August.

As the hourly chart of S&P futures showed, aside from the last hour, the rally had built nicely as the day progressed.

By contrast, forex markets told a different story, while it had been a ‘risk-on’ day overall, for most pairs, the bulk of the move was already made by the morning session.

The day’s top mover, the NZD/USD had retreated some way from the highs, but the Canadian dollar managed to improve on its morning position following better than expected Canadian housing starts.

By contrast, the EUR/USD was in an ugly trading range throughout the day as Italian bonds continued to flash red in the ‘danger zone’ above 7%, a level that no country has recovered from yet according to Thomson Reuter’s Michael Cartine.

Gold managed to put in a positive session though with the precious metal looking to attack the December high.

 
Before trading with spread betting, CFDs or financial fixed odds ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved. These products may not be suitable for all investors, seek independent financial advice where necessary.

Note that spread betting and CFD trading carry a high level of risk to your capital and you can lose more than your initial investment.

The Financial Fixed Odds update by David Evans, Market Analyst, BetOnMarkets.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.
 

This morning commodity currencies, in particular the New Zealand dollar are leading markets higher following better than expected Australian Building Approvals in the small hours of the morning.

In FX spread betting, there is a general risk-on feel across most pairs with the NZD/USD up 0.75%, the AUD/USD up 0.63% and the AUD/JPY up 0.70%.

Stock markets are following suit with the FTSE 100 up 0.85% and S&P 500 futures up 0.55%.

Aside from the gap higher on the first trading day of the year, 2012 has been something of a grind so far, so traders will be hoping to see some decent follow through action today.

In gold spread betting, the precious metal is following markets higher, up 0.61% on the day.

The euro is still acting as a dead weight on markets though and it’s unlikely we’ll see a sustained rally without some solid movement from Europe.

Trading Today

We only have middle tier data today with Canadian housing starts the highlight at 13.15.

NZD/USD Fixed Odds Trading Idea

As one of the strongest trend following currencies of 2011, today’s follow through rally on the NZD/USD could be a good opportunity to speculator on further upside.

A way to trade this might be a HIGHER trade predicting that the NZD/USD closes above 0.8000 in 7 days time for a potential return of 237%.

Editor’s note: If you lose a fixed odds trade, you will lose 100% of your stake.

The Markets Yesterday Afternoon

Markets were mixed yesterday with the FTSE 100 closing down, but US markets trading up slightly.

The euro held on to the morning’s gains, but only after the EUR/USD hit new multi month lows.

Greece was the main focus with the Hellenic nation appearing to return to its recent trick of ‘negotiation by headline’.

The NZD/USD continued to buck the trend though, rallying 0.68%.

 
Before trading with spread betting, CFDs or financial fixed odds ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved. These products may not be suitable for all investors, seek independent financial advice where necessary.

Note that spread betting and CFD trading carry a high level of risk to your capital and you can lose more than your initial investment.

The Financial Fixed Odds update by David Evans, Market Analyst, BetOnMarkets.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.
 

Typical of a Monday morning, spread betting markets are yet to really show their hand, but there are some noteworthy moves in development.

The first is the US easing back after the US dollar index futures hit their highest level since 2010 on Friday. This is bringing welcome relief for the EUR/USD which is up 0.2% with the NZD/USD leading the rally, up 0.42%.

The AUD/USD is lagging, down 0.20% after Australian retail sales disappointed in the small hours of the morning.

Trading Today

Today we have European Sentix Investor Confidence, which is expected to come in similar to last month at -23.8.

German industrial production is also expected to make for gloomy reading at -0.5%.

Other than this we can look forward to Canadian Building Permits at 13.30 and the BOC business outlook survey at 15.30.

GBP/USD Fixed Odds Trading Idea

With the US dollar index pulling back from the highs, it could be time for some consolidation in the world’s reserve currency.

This could provide some upside to dollar pairs such as the GBP/USD which has been holding support in the 1.5400 region.

The British pound has shown some relative strength against the euro of late and while this may not last, the GBP/USD could still have some upside.

A way to trade this might be a HIGHER trade predicting that the GBP/USD closes above 1.5500 in 7 days time for a potential return of 161%.

Editor’s note: If you lose a fixed odds trade, you will lose 100% of your stake.

The Markets on Friday Afternoon

On Friday Europe once again dominated proceedings with Spanish, Italian and Australian bonds coming under pressure.

In addition, the EU poured cold water over Belgium’s budget predictions for being too optimistic.

The Hungary saga continued to roll on with financial spread betting investors speculating over which banks are most exposed to a default there.

A Hungarian credit downgrade by Fitch certainly didn’t help either.

This kept a lid on any rally that would have no doubt been sparked by better than expected US payroll numbers and a smaller than expected unemployment rate which dropped to 8.5%.

The EUR/USD was down 0.54% with the EUR/JPY down 0.64%. The GBP/USD fared a little better and testing the bottom half of its trading range.

 
Before trading with spread betting, CFDs or financial fixed odds ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved. These products may not be suitable for all investors, seek independent financial advice where necessary.

Note that spread betting and CFD trading carry a high level of risk to your capital and you can lose more than your initial investment.

The Financial Fixed Odds update by David Evans, Market Analyst, BetOnMarkets.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.
 

Where to Spread Bet on the US Dollar / Hungarian Forint

You can trade on spread betting markets such as the US Dollar / Hungarian Forint with spread betting companies like:

• CapitalSpreads
• GFT
• City Index

To see which companies offer 24 hour trading, new account offers, stop losses and trading charts see Spread Betting Companies.

How to Spread Bet on the US Dollar / Hungarian Forint

If you are going to spread trade on a foreign exchange pair like the US Dollar / Hungarian Forint then, on visiting a spread betting website like Capital Spreads on Friday, you may have seen a spread of 247.550 Ft – 247.950 Ft.

This means you could bet on the US Dollar / Hungarian Forint to move above 247.950 Ft or below 247.550 Ft.

If you are spread trading, you bet on every unit the market moves up or down; specifically, for the US Dollar / Hungarian Forint market a unit is 0.010 Ft of the forex pair’s price movement.

For example, you could decide to trade £1 for every 0.010 Ft the US Dollar / Hungarian Forint rises or falls.

Betting on the Market to Rise

If you were to buy the US Dollar / Hungarian Forint at 247.950 Ft and the forex pair increased then the spread might become 249.810 Ft – 250.210 Ft. If that happened, you could decide to take your profits by closing your trade at 249.810 Ft.

P&L = (settlement value of the market – opening value of the market) x stake per 0.010 Ft
P&L = (249.810 Ft – 247.950 Ft) x £1 per 0.010 Ft stake
P&L = 1.860 Ft x £1 per 0.010 Ft
P&L = £186.00 profit

Financial markets also move down, if the market had decreased to, for example, 246.214 Ft – 246.614 Ft, you may decide to close your spread bet to limit your losses. If so, you would sell the market at 246.214 Ft.

Therefore, with the same £1 per 0.010 Ft stake:

P&L = (settlement value of the market – opening value of the market) x stake per 0.010 Ft
P&L = (246.214 Ft – 247.950 Ft) x £1 per 0.010 Ft stake
P&L = -1.736 Ft x £1 per 0.010 Ft
P&L = -£173.60 loss

Betting on the Market to Fall

One of the many advantages of placing a spread bet is that you can sell the markets.

At the start of the example, the market was priced at 247.550 Ft – 247.950 Ft.

If you were to sell the US Dollar / Hungarian Forint at 247.550 Ft and the forex pair decreased then the spread might become 245.201 Ft – 245.601 Ft. If that were to happen, you might choose to close your spread bet for a profit at 245.601 Ft.

P&L = (opening value of the market – settlement value of the market) x stake per 0.010 Ft
P&L = (247.550 Ft – 245.601 Ft) x £1 per 0.010 Ft stake
P&L = 1.949 Ft x £1 per 0.010 Ft
P&L = £194.90 profit

Of course, if the market increased to, for example, 248.969 Ft – 249.369 Ft, you could choose to close your bet to limit your losses. If this were the case, you would buy at 249.369 Ft.

With the same £1 per 0.010 Ft stake:

P&L = (opening value of the market – settlement value of the market) x stake per 0.010 Ft
P&L = (247.550 Ft – 249.369 Ft) x £1 per 0.010 Ft stake
P&L = -1.819 Ft x £1 per 0.010 Ft
P&L = -£181.90 loss

US Dollar / Hungarian Forint Rolling Daily spread betting prices taken as of 06-Jan-12.

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.

Where to Spread Bet on Eurasian Natural Resources

You can trade on spread betting markets such as Eurasian Natural Resources with spread betting companies like:

• Capital Spreads
• GFT
• CMC Markets

To see which companies offer 24 hour trading, new account offers, stop losses and trading charts see Spread Betting Companies.

How to Spread Bet on Eurasian Natural Resources

If you decide to spread bet on UK shares like Eurasian Natural Resources then, on visiting a spread trading site like Financial Spreads on Friday, you may have seen a spread of 710.1p – 711.9p.

This means you can spread bet on Eurasian Natural Resources to increase higher than 711.9p or to decrease lower than 710.1p.

When making a spread bet, investors bet on every unit the market moves up or down. Specifically, for the Eurasian Natural Resources market a unit is 1p of the share’s price movement.

Accordingly, you could decide to bet £5 for every penny Eurasian Natural Resources goes up or down.

Spread Betting on the Market to Increase

If you were to buy Eurasian Natural Resources at 711.9p and the shares went up then you might see the spread move to 730.8p – 732.6p. Assuming this was the case, you might decide to close your trade for a profited 730.8p.

Profits (or Losses) = (final level of the market – initial level of the market) x stake per penny
Profits (or Losses) = (730.8p – 711.9p) x £5 per penny stake
Profits (or Losses) = 18.9p x £5 per penny
Profits (or Losses) = £94.50 profit

The markets can of course fall, if the market had decreased to, as an example, 689.8p – 691.6p, you may decide to close your trade to restrict your losses. Therefore, you would sell your spread bet at 689.8p.

So, with the same £5 per penny stake:

Profits (or Losses) = (final level of the market – initial level of the market) x stake per penny
Profits (or Losses) = (689.8p – 711.9p) x £5 per penny stake
Profits (or Losses) = -22.1p x £5 per penny
Profits (or Losses) = -£110.50 loss

Spread Betting on the Market to Decrease

One advantage of using a spread bet is that investors can go short of the markets.

At the beginning of this example, the spread betting price was 710.1p – 711.9p.

If you were to sell Eurasian Natural Resources at 710.1p and the shares went down then the spread could become 693.2p – 695.0p. If that were to happen, you could decide to take your profits by closing your spread bet at 695.0p.

Profits (or Losses) = (initial level of the market – final level of the market) x stake per penny
Profits (or Losses) = (710.1p – 695.0p) x £5 per penny stake
Profits (or Losses) = 15.1p x £5 per penny
Profits (or Losses) = £75.50 profit

However, if the market increased to, as an example, 725.9p – 727.7p, you might want to close your trade to prevent further losses. In that case, you would buy back at 727.7p.

With the same £5 per penny stake:

Profits (or Losses) = (initial level of the market – final level of the market) x stake per penny
Profits (or Losses) = (710.1p – 727.7p) x £5 per penny stake
Profits (or Losses) = -17.6p x £5 per penny
Profits (or Losses) = -£88.00 loss

Eurasian Natural Resources Rolling Daily market taken as of 06-Jan-12.

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.