| It looks like some of the companies that one would | | | | move above 328.2p or below 326.9p. |
| expect to be at the forefront of any world recovery | | | | When you spread bet, you trade on every unit the |
| have started to raise the warning flags again. A | | | | market goes up or down; in the case of the Barclays |
| series of economic analysis announcements are | | | | market a unit is 1p of the share's price movement. |
| struggling to register much joy for the heavily | | | | So, you might choose to spread bet £3 for every |
| indebted western nations. | | | | penny Barclays stock increases. |
| It is still possible that the banks were in danger of | | | | If you were to buy Barclays at 328.2p and the share |
| ‘doing a Japan’ over their debt exposure to | | | | increased then you might see the spread move to |
| the large number of leveraged buyouts of 2005-2007. | | | | 356.0p - 357.3p. If this were the case, you could |
| Yes, the banks are not writing off much of the debt | | | | decide to take your profits by closing your trade at |
| however this is in the knowledge that most deals still | | | | 356.0p. |
| have a few years to run. The banks are probably | | | | Your Profits (or Losses) = (closing price of the |
| hoping for a bit of an economic turn around to help | | | | market - opening price of the market) x stake per |
| them out. With interest rates down below 1%, the | | | | penny |
| temptation to run the risk is high. | | | | Your Profits (or Losses) = (356.0p - 328.2p) x £3 |
| None of the world’s banks wish was to ask the | | | | per penny stake |
| various governments for more money as the strings | | | | Your Profits (or Losses) = 27.8p x £3 per penny |
| attached are far from charitable. And if the financial | | | | Your Profits (or Losses) = £83.40 profit |
| system can build up cash reserves over the next | | | | Of course, if the market had decreased to, for |
| few years until 2013/15, when much of the debt is | | | | example, 303.0p - 304.3p, you could choose to close |
| due for repayment, the banks will be in a much | | | | your spread bet to prevent further losses. |
| better position to take equity/debt deal | | | | Therefore, you would sell back at 303.0p. |
| replacements. | | | | With the same £3 per penny stake: |
| So if the banking stock looks volatile, what are the | | | | Your Profits (or Losses) = (closing price of the |
| options for the investor? A trading account where | | | | market - opening price of the market) x stake per |
| you can both speculate on stock to go up and down | | | | penny |
| may be the way forward. | | | | Your Profits (or Losses) = (303.0p - 328.2p) x £3 |
| If that’s what you are looking for then a spread | | | | per penny stake |
| betting account might suit your needs. | | | | Your Profits (or Losses) = -25.2p x £3 per penny |
| With inancial spread betting you do not purchase the | | | | Your Profits (or Losses) = -£75.60 loss |
| stocks or assets. This means that you are not | | | | As the above illustrates, when speculating you must |
| constrained to simply speculating on an increase in | | | | always remind yourself that the markets can go |
| value. If your research indicated a weaker market, | | | | down as well as up. With spread betting you can lose |
| you could spread bet on the market to decrease. | | | | more than your original stake or investment. |
| Also, spread trading offers a wide range of markets | | | | And like the adverts say, spread betting carries a |
| so that investors are not just limited to stocks and | | | | high level of risk. You should only speculate with |
| shares. Stock market index values, foreign exchange | | | | funds you can afford to lose. Before trading, please |
| pairs, commodity prices and interest rates are all | | | | ensure that spread betting matches your investment |
| tradable from the same account. | | | | requirements, familiarise yourself with the risks |
| So how does it work? Let’s say you wanted | | | | involved and, if necessary, seek independent advice. |
| spread bet on the UK’s Barclays Bank. | | | | If you are still looking to trade, where should you go? |
| Note that you could also bet on US Banks, German | | | | Make sure the firm you trade with is Authorised and |
| Car markers or even some of the major Indian | | | | Regulated by the Financial Services Authority, this |
| companies. | | | | generally ensures a certain quality level. Companies |
| Looking at Barclays though, at the moment there is a | | | | like Financial Spreads and ShortsandLongs will let you |
| spread betting price of 326.9p - 328.2p. | | | | trade on all of the markets mentioned above. |
| Therefore, you could spread trade on Barclays to | | | | |