Spread Betting Euro Shares

There are many opportunities with most spread betting companies to bet in alternative markets, and frequently at least the top companies in different countries market indices are listed separately for you to make individual bets on the share prices. For example, IG Index allow you to spread bet on the shares of Daimler AG, which includes such familiar brands as Mercedes-Benz and Smart cars in addition to Daimler Trucks. The current quote is 3424 sell – 3430 buy.

Say you have done your research, and are convinced that the index is going up. You might wish to place a long bet at 3430 for £2.50 per point. The index goes up to a quoted price of 3551 – 3557, and you close your bet and count your profit.

If you want to figure out for yourself how much you have won, the calculation is quite easy. You simply have to work out how many points you gained on your bet, and multiply this by your stake. Your bet was placed at a level of 3430, and was closed at the selling price of 3551. This means that you gained 3551 less 3430 points, which is 121 points.

Your initial stake was £2.50 per point, and you’ve gained 121 points. Multiplying it out, you find you have won £302.50.

Sometimes the market does not move in the direction we want, so suppose that the share price fell to a quote of 3403 – 3409, and you decided to close your bet at a loss to avoid losing any more. In this case you have lost 3430 less 3403 points, which is 27 points. Therefore your financial loss is 27 times £2.50, or £67.50.

Indesit is an Italian company that produces “white goods” such as refrigerators. Their price with the spread betting company is currently 438.90 – 441.10. Things don’t look good, with the prospect of a reduced earnings report, so you decide to take a short bet on their shares, staking £5 per point at a price of 438.90. Perhaps you’re successful, and close the bet a little later at 402.35 – 404.55. Your profit in points is 438.90-404.55 (the buying price as this was a short bet). This is a total of 34.35 points.

At your chosen stake of £5 per point, this works out to £171.75 profit.

Whenever you take out a spread bet, or indeed any sort of financial trade, it is a good idea to know exactly how far you will let it run against you before you decide that the bet has failed, and close it to cut your losses. Say in this Indesit bet the price goes up to 449.20 – 451.40, and you have decided that you cannot let it go any higher. You close the bet for a loss, and work out how much it has cost you.

The number of points that it went against you is 451.40-438.90, which works out to 12.5 points. At your chosen stake of £5 per point, your loss is £62.50.

How to Spread Bet Euro Shares

If you’re interested in financial affairs outside of this country then to spread bet Euro shares may be just what you need. Most spread betting companies give you a big range of shares from various countries on which to place your bets, and with international trade you can easily find companies that you know of and perhaps whose products you already use. The complication of trading across country boundaries, and in different currencies, is totally eliminated if you approach the markets through a spread trading provider.

Of course, many people think of the English stock market, the London Stock Exchange and the FTSE indices when the subject of share trading comes up. But there is no reason to restrict yourself to the local markets, particularly when the Internet gives you access to so much information from around the world.

There are bound to be some differences from trading shares locally, and it is up to you to make sure you understand how government regulations and nationalistic factors figure into euro share prices. While you don’t have to deal directly with those regulations, when making your bets through your spread betting provider, there may be times when the administration of foreign shares can be a little different from what you expect, and this may affect the values. As the share values are fairly directly translated into the spread betting prices, you need to understand those influences.

Another point to watch is that some company shares are available in different markets, and you need to be clear which market you are trading on. Although you should expect the shares to maintain parity across currency boundaries, this may not always be the case. Spread trading companies such as IG Index divide their shares out by country, with alphabetical indexing within each group, so it is easy to see which market you are betting on.

Some of the best advice that you can have for financial trading is to know what you are dealing with. It is risky and possibly futile to select products based purely on a scan of the charts, with no real knowledge of what the company does. So when you’re looking at trading on European companies, try to restrict your search to those which you recognize or can find out about quickly.

With the availability of easy trading on European shares, you have access to a whole range of choices that a few years ago were not available. One trading strategy is to find the best company in the best market sector in a thriving economy, and to take a long bet on the basis that its good performance is not an accident, and you can expect the shares to go higher. The complement of this strategy is that you look for the poorest performer in an ailing market sector in a depressed economy, and you take a short position on the basis that the shares are likely to continue falling. There are many other strategies that can be applied, and technical analysis teaches us that no matter what the market, human nature will stay the same and on balance allow a degree of market prediction.