Spread Betting German Shares

There are some major companies headquartered in Germany, and it is easy to gain from their share price movements, whether up or down. Say you feel that shares in Adidas AG are going to drop in price over the next few weeks, then you could place a short bet on a future price expiring in a few months. The current quote for this is 5035 – 5080, and you might wager £1.50 per point.

Say that as time goes by you are proved correct, and the price does fall. When it reaches 4825 – 4865 you close your bet and figure out how much you have won. Here’s the calculation: –

  • You placed a short bet, so it was at the “selling” price of 5035
  • and to close the bet, you use the “buying” price of 4865.
  • Therefore the number of points you gained is 5035 minus 4865
  • which is 170 points.
  • Your bet was for £1.50 per point,
  • which means you have won 170 times £1.50
  • which is £265.

Sometimes, in fact more often than you would like, the price will go in the other direction from your bet, causing a loss. The trick to successful spread betting is not to let your losses become too large. Say the quote went up to 5092 – 5132, and you decided to close your bet. You can work out how much you lost like this: –

  • Your bet was placed at the selling price of 5035
  • and closed at the buying price of 5132.
  • Therefore the number of points you lost was 97.
  • Your bet was for £1.50 per point
  • you lost 97 times £1.50
  • for a total loss of £145.50.

Taking another example, Bayer AG is currently quoted on a daily rolling bet at 4610 – 4619. You place a long bet at 4619 for £4 per point. After a few days, the price has gone up to 4693 – 4702. You close your bet and take your winnings. Your spread betting company will have charged your account a little bit of interest each night, but on the bet you have gained 4693 minus 4619 points, which is 74 points.

As you staked £4 per point, this means your winnings are £296.

Once again, you must remember that prices can go either up or down, and won’t always go in the direction you want. If for instance the price went to 4583 – 4592 and you saw no prospect of it turning around, you could close your bet to minimize your loss. With a long bet, it closes at the selling or lower price of 4583. This means that you have lost 4619 less 4583 points, which works out to 36 points.

You originally placed your bet at £4 per point, so you can calculate how much this bet cost you. 36 points times £4 makes a total loss of £144. The bet actually cost you a little more than this, because again your account was charged a small amount of interest for each night the bet was rolled over.

Other Notable Companies

LUFTHANSA: Industrial action keeps taking a toll on the German airline Lufthansa facing stoppages over cabin crew pay disputes which negatively impacts the company’s final results. A recent ruling by the European Court of Justice now leaves the airline, and indeed the entire industry, liable to compensation costs in the event of delays.

How to Spread Bet German Shares

Germany is recognized as a major financial powerhouse in the European monetary system, and this is partly because it has a strong stock market with many excellent companies. The tale of Germany is pretty much an economic miracle, moving from the problems of hyperinflation then devastation in the Second World War to a radical philosophy of a strong central bank separate from the government, a large social welfare system, and a free-market capitalism which welcomes government involvement to limit monopolies.

Germany stands for the economy of Europe, with countries such as Spain, France, and Italy simply vying for second place. With more than 80 million citizens and the largest economy among the many members of the European Union, it is natural that Germany’s economy has a major influence on this region of the world. So it makes sense that you might want to spread bet German shares, and take part in some of that action. Fortunately most spread betting providers can give you a large selection of shares on which you can spread trade and several of them are household names. Companies like Adidas, Bayer, Siemens, and Volkswagen can be easily researched and the ups and downs of the share prices followed to make profitable bets.

The advantage of including German shares in the range of financial securities that you bet on is that the German market typically moves differently from other majors such as the UK and US markets. That means that when the markets that you usually trade aren’t responding, or perhaps not trending if that is part of your trading strategy, you can look to the German stock market and see if there are better opportunities there.

If you want to know how to spread bet German shares, then you should look to the basics that you apply to any other financial securities. If you are betting on the larger German companies, then there is a certain stability and momentum to the price moves, and it is likely that you will be able to find out about any particular company news that could have an effect. The smaller companies need a little bit more research, as they’re not so well known, and will not be covered in such depth by the financial news. But being part of the Common Market means that their operation is transparent and familiar, and not so difficult to understand as emerging markets in other regions of the world.

To see what moves the German market in general, you might want to look up the German ILO, which is a news release covering the employment figures. The numbers are broken down into three categories, the economically active population, the number of unemployed, and the number of people employed, and these figures are compared directly to rates in other countries. This monthly release can be expected to move the DAX, or German stock market index, which shows that it impacts the shares that make up that index.