Spread Betting Dutch Shares

There are some interesting companies to spread trade on the Amsterdam stock exchange, or Euronext Amsterdam as it is now known, and many spread betting companies now offer you this option. Consider for instance Royal Dutch Shell “A” shares, for which the current daily rolling bet is quoted at 2603.4 – 2608.6. If you think these shares are going up, you could place a long bet for £7 per point at 2608.6.

These shares show reasonable volatility, and in a few days you might see the price now quoted at 2632.4 – 2637.6. If you decide to close your bet at this level, then it would close at the “selling” price of 2632.4.

Here is how you work out how much you have won with this bet. Your bet was placed at 2608.6, and closed at 2632.4. Working this out, 2632.4 less 2608.6 is 23.8 points, so this is how much you have won. For your stake of £7 per point, your total winnings are £166.60. As this was a daily rolling bet, there would have been a small charge each night for interest.

Some of the time, your trade will go in the wrong direction, and importantly you should know when to cut your losses and close your bet. Say that the quote dropped below 2600, and this was when you had decided that you would have to exit and lose some money. You close your bet when your spread betting provider is quoting 2593.7 – 2598.9. This means you have lost 2608.6-2593.7, a total of 14.9 points.

You can work out how much you lost in the same way as your winnings. Your bet was £7 per point, and you lost 14.9 points, so you simply multiply these numbers together. This comes to £104.30, and again you would have been charged a little extra for interest.

Considering now another group on the Dutch market, a futures bet on ING Groep NV is currently listed at 549.3 – 554.3. Perhaps you see this as a shorting opportunity, and want to sell at 549.3 at a stake of £3 per point. If the price goes down to 526.2 – 531.2 you could decide to close your bet and work out how much profit you have made.

Your short, or selling bet was placed at a price of 549.3 and closed at a price of 531.2. That means that you have gained 18.1 points. For your stake of £3 per point you finish up with a profit of £54.30. As this is a futures based bet, there isn’t any adjustment for interest.

Once again, it’s always possible that the price will go in the wrong direction and you will have to “bail out” before the potential losses become too great. If the price increased after you had placed your bet, you might cut your losses when it reaches 556.1 – 561.1. In this case the bet was placed at 549.3 and closed at 561.1, which works out to 11.8 points against you. Therefore with a stake of £3 per point, you would have lost £35.40.

How to Spread Bet Dutch Shares

Although one of the lesser markets, there are some interesting companies trading on the Dutch stock exchange in Amsterdam. Along with other European exchanges, the Amsterdam market has merged into a group called Euronext, and is known individually as Euronext Amsterdam. With some spread betting providers you will find the market referred to as “Shares – Netherlands”. It is actually incorrect to refer to this country as Holland, as strictly Holland is only a part of the Netherlands, though that name is in common usage for the whole country.

One of the companies with which you are no doubt familiar is Royal Dutch Shell, which also trades on the London markets. Philips, the electronics manufacturer, is also Dutch, and one of the largest electronics companies in the world, having been founded more than a century ago. They even lay claim to having invented the audio cassette. So there are some significant players even though the Dutch market is not well recognized.

The Netherlands use the euro, but obviously with spread betting you place bets in your local currency, such as pound sterling, and don’t get involved with currency conversions. You will find that quite a few spread betting companies list Dutch shares, generally offering the ones that make up the AEX index (of which there are 25) and other large companies.

Being attached to the euro is both a blessing and a curse. Any European issues, even from more distant countries like Greece and Italy, have an immediate impact on the markets, and this is the issue with having one currency with a multitude of governments. But the euro is a much more recognized currency than the Dutch guilder was, and allows for freer and more open trade across national boundaries.

If you plan to spread bet Dutch shares you should spend some time studying the markets, and seeing how volatile they are. One of the keys to profitable trading is summarized in the expression “Cut your losses, and let your winners run”, and to implement this effectively you need to have a good idea of the general range of price movement you should expect.

“Cutting your losses” refers to closing a spread trade quickly if it is clearly going in the wrong direction, and losing you money. But if you close the trade too quickly, because you did not allow for the volatility that the financial security customarily experiences, and the trade turns around to make a profit, then you will be losing on a potentially winning spread bet. On the other hand, if you hang on to a losing bet too long, then you face big losses. The answer is to find a compromise, and for this you need to have a good awareness of the usual price fluctuations.

You will find several companies that give you good opportunities to profit in the Netherlands share market, and including spread betting Dutch shares in your repertoire of possible actions means that you have further choices for the times when your local markets are not worth trading.