Stocks and Shares Trading in 2010

admin — Wed, 06 Jan 2010 11:34:55 +0000

I like to trade stocks and shares but what do when unemployment in both the US and UK keep increasing? Interestingly the major stock markets are also increasing.Unfortunately, equity markets are completely detached from the ‘real’ economy. So as unemployment continues to rise, and is expected to continue rising throughout 2010, we could see the Dow Jones and FTSE 100 continue to rally.Yes the stock markets are supposedly ‘forward thinking’ and investing in the future but the current picture is unclear. Looking at the UK, inflation looks like it will remain around its target of 2%. Of course controlling inflation is easier said than done. No one knows what affect the quantitative easing will have on the economy in 6 months time.The focus will be on the outlook for growth and indications of when the US, European and UK stimulus packages will end. Growth is returning but, with Governments short of funds, tax rises are expected in 2010. The little growth we have could quickly end.All-in-all the markets look like they will remain volatile for quite some time. It is not all bad news though. There are a few ways of taking advantage of the market volatility. One option is spread betting, with a spread betting account you can go long or short of the markets. This means an investor can trade a market in the direction they feel it will move. You are not limited to only speculating on markets to go up. If you think the FTSE 100 or Dow Jones will go down you can bet on them to fall. Another advantage in the current volatile climate is that you purely are speculating on the future price of a market; you are not actually buying or selling anything. This lets you complete trades quickly.Of course, all forms of financial investment have the potential for incurring losses. For example, trading in stock, property, investment funds and pensions can lead to you losing money. With spread bets your losses can exceed your initial investment.Having said that spread bets are tax free, there is no capital gains tax, no stamp duty and no income tax on spread betting*. And unlike traditional stocks and shares trading, there are no commissions or broker’s fees.If you are considering spread betting then you should also consider where you might trade. A number of spread betting firms offer the usual benefits of letting you trade thousands of UK, US and European markets as well as letting you trade outside normal market hours. Some firms, such as FinancialSpreads.com, will let you trade markets 24 hours a day.A final comment though, spread bets carry a high level of risk to your capital. You should only speculate with funds you can afford to lose. Like the adverts say, before trading, please ensure that spread betting matches your investment requirements. Familiarise yourself with the risks involved. Seek independent advice where necessary.* Based on current UK tax law, if you pay tax in another jurisdiction then tax law may vary.

Trading Banking Stocks and Shares in 2010

admin — Sun, 27 Dec 2009 23:46:04 +0000

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

Butterfly Options » stocks and shares

Stocks and Shares Trading in 2010

Trading Banking Stocks and Shares in 2010