Huge increase in secondary market liquidity opens the way for spread bettors
IG Index, the UK's leading financial spread betting company, is now offering its clients prices on sovereign debt issued by the Republic of Italy.
Known as Buoni del Tesoro Poliennali - or BTPs - this new offering complements the existing treasury prices that are already being quoted for various instruments in the German, UK, US and Japanese bond markets.
David Jones, chief market strategist at IG Index, commented:
'Historically, yields across all the eurozone sovereign debt instruments were very similar, with the German issues being seen as the benchmark. However, over the last 12 months there has been a decoupling of this relationship, so the heavily traded BOBL and BUND are no longer a reasonable proxy for other eurozone government bonds. This also means there has been a huge increase in the volumes traded in the underlying market for instruments like BTPs.
‘A liquid underlying market - combined with the current levels of volatility and a steady flow of news that has the ability to impact the price - has the potential to make BTPs popular with financial spread bettors. An expanded interest in fixed income instruments as a whole could follow as well.’
David Jones, added:
'Fixed income markets have often been seen as too slow-moving to be of interest to the majority of the financial spread betting community. However, with politicians, central bankers and ratings agencies now having the potential to shift bond yields, and so long as the risk of default looms, the popularity of trading these instruments will continue to build.'
IG Index is offering Long-Term Euro-BTP futures contracts as determined by Eurex.
About IG Index
IG Index is the world's leading financial spread betting provider, offering clients the ability to online spread bet on over 7,000 shares listed on markets worldwide, along with indices, forex, commodities and treasuries.
Established in 1974, IG Index is part of IG Group (IGG.L), which employs in excess of 900 people and has offices in 14 countries worldwide.
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
Content approved / provided by IG Index which is Authorised and regulated by the Financial Services Authority, FSA Register number 114059.
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.
'Italian Bonds Spread Betting', Review by D. Jones, last update: 15-Sep-11
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