Spread Betting on Microsoft | Spread Trading

Microsoft Corporation is a US multinational company which is extremely well known to many computer users. As a large corporation, it has many long-term investing followers, and it also provides opportunities in spread betting. It is headquartered out of Washington. The company was originally founded by Bill Gates and Paul Allen in 1975, and made BASIC interpreters for the minicomputer Altair 8800. Its path was set when it supplied a personal computer operating system called PC-DOS to IBM, and this went on to be the basis of MS-DOS used on the majority of personal computers today.

The other major development was the Windows interface, a graphical extension for MS-DOS, in 1984. The MS Office software suite, including Microsoft Word and Microsoft Excel, came out in 1990, and has fought off opposition from Lotus and Corel among others to become the de facto standard in much of business.

Spread Betting Microsoft Shares

While the operating systems and office software are the major products associated with Microsoft, it has expanded into other areas such as the videogame industry, with the Microsoft Xbox, and the Internet search field, with Bing. Other diversifications include the acquisition of Skype in May 2011 for $8.5 billion, and Microsoft has made a number of other corporate acquisitions in order to stay ahead of the technology and competitors.

Looking at the recent daily price chart above, you can see that Microsoft has been trading sideways for a number of months. Depending on your trading plan, these short-term fluctuations in price which you can see in the centre of the chart may present possible spread betting opportunities, but other short-term traders may find them too random and diverse. With the benefit of hindsight, it is possible to see how the Mac Dee pinpointed the downtrend and uptrend on the left, and the most recent downtrend on the right-hand side. Having reached the lower Bollinger Band, it will be interesting to see if there is a breakout downward as the MACD may be suggesting, or if the band will offer support to the price.

Spread Betting Microsoft Rolling Daily

The price of a daily rolling bet on Microsoft is currently 2995 – 3002 (about $30 per share). As a technology stock, Microsoft is volatile and reacts to frequent news items, at the present time concerning Windows 8 and mobile computing. It has for many years been in competition with Apple which recently surpassed it in sales with its greater range of “iProducts”. If you feel bearish about the price having studied the technical analysis, you may want to take out a short or sell bet, staking perhaps £3 per point.

Assuming that your analysis is correct and that the stock falls in price, you might find that you are able to close your bet for a win when the quote is 2846 – 2853. Working out how much you have won, your starting price was 2995, and the closing price was 2853. That means you have a point difference of 142. Multiplying by your stake of £3 per point, that gives you a profit of £426.

If your analysis doesn’t work out, and the stock goes up in price then you may have to close your bet for a loss in order to avoid further loss. You might choose to do this when the price goes up to 3115 – 3122, closing your short bet at the higher price of 3122. This time the point difference is 3122 minus 2995, which is 127 points. For your chosen size of stake, this amounts to a loss of £381.

Many spread betters use the stop loss order to make sure that losing bets are closed for them, even if they are not online or following the market at the time. It might be that a stoploss order would close this losing bet earlier, perhaps at a quote of 3081 – 3088. In this case you would have lost 3088 less 2995 points, or 93 points. For this bet size that amounts to £279.

Microsoft Futures Based Bet

The current price for a futures based spread bet for the far quarter on Microsoft is 2995 – 3029. If you want to take a bullish stand on this share, you might choose to stake £5 per point on a long bet. Looking at the chart, your target may be around 3150. If things go well, perhaps the price will go up to 3143 – 3171, and you will decide to close the bet as it seems to be running out of steam.

The bet was placed at 3029, and it closed at 3143. That means you have gained 3143 minus 3029 points, a total of 114 points. At £5 per point, you have made a profit of £570.

Even if your technical analysis was good, you might find that the market did not proceed as expected, and be stuck with a losing position. Perhaps in this case the price dropped to 2898 – 2925, and you decided that you had to close the bet and accept the loss to avoid further damage to your account. As before, the bet went on at 3029, but this time it finished at 2898 for a loss of 131 points. This would have cost you £655.

If you are to be successful at spread betting, it is important that you limit your losses, and sustaining this amount of loss simply because perhaps you were not watching the market at the time is not acceptable. You might want consider using a stoploss order on all your bets, which will guarantee that the losing bet is closed in a timely manner, whether or not you are online. With a stoploss order on this bet, you might find that the bet would be closed for you if it dropped down to 2946 – 2973. With a starting price of 3029, and the closing price of 2946, this time you would have lost 83 points which amounts to £415.