Financial Spread Betting - Finding the Movers
One of the great advantages of Financial Spread Betting over investing in equities directly is the ability to place bets that effectively both 'buy' and 'sell' stocks, without ever having to actually own any.
So now instead of only looking for stocks that we believe will rise in price, we can make just as much money on stocks that we believe are going to fall in price.
Just think, twice the opportunity! So, in an environment where we can make money on stocks going up or down, we soon realise that the only thing we can't make profit on is stocks that stay the same.
So fundamental to our strategy is clearly to find stock that will change in value, and our prized stock are the 'movers', those that change value rapidly.
Whilst it may be true that stocks and share prices can 'drift' with market sentiment over time, the biggest movements arise from information about the company somehow finding its way into the market.
That could come in the form of a news story, or perhaps a press release.
Whilst you should always be alive to the possibilities that these situations present, it's difficult to plan for them in advance, as they are rarely scheduled events.
However, there is at least one event each year for every company where financial information does come on to the market, and that is when they release details about their financial results.
Indeed for the quoted companies in the FTSE 100 and FTSE 250 this is usually twice yearly or even quarterly.
Given that there are 350 companies in those indices combined, that is 700 statements a year or almost 3 each trading day.
Generally speaking they will be released at 7am, before markets open.
Now, the companies do speak to analysts throughout the year, and if the results are in accordance with city expectations then the impact of the results may already be factored into the share price.
On many occasions, however, it is not, particularly in turbulent economic times.
And the beauty of results announcements are that you can find out exactly when they are going to be, as they are pre-scheduled by the company involved and listed in most of the financial press the week in advance.
So by being aware, you get the chance to watch how the market reacts to the statements as the markets open.
You need to take care with this kind of spread bet in the same way as you would take caution with any bet.
Watch some first before you jump in and invest.
See how the market reacts, and work the trends.
Don't forget, it doesn't matter what you think of the results, it's how the market reacts to them that you need to respond to.
So now instead of only looking for stocks that we believe will rise in price, we can make just as much money on stocks that we believe are going to fall in price.
Just think, twice the opportunity! So, in an environment where we can make money on stocks going up or down, we soon realise that the only thing we can't make profit on is stocks that stay the same.
So fundamental to our strategy is clearly to find stock that will change in value, and our prized stock are the 'movers', those that change value rapidly.
Whilst it may be true that stocks and share prices can 'drift' with market sentiment over time, the biggest movements arise from information about the company somehow finding its way into the market.
That could come in the form of a news story, or perhaps a press release.
Whilst you should always be alive to the possibilities that these situations present, it's difficult to plan for them in advance, as they are rarely scheduled events.
However, there is at least one event each year for every company where financial information does come on to the market, and that is when they release details about their financial results.
Indeed for the quoted companies in the FTSE 100 and FTSE 250 this is usually twice yearly or even quarterly.
Given that there are 350 companies in those indices combined, that is 700 statements a year or almost 3 each trading day.
Generally speaking they will be released at 7am, before markets open.
Now, the companies do speak to analysts throughout the year, and if the results are in accordance with city expectations then the impact of the results may already be factored into the share price.
On many occasions, however, it is not, particularly in turbulent economic times.
And the beauty of results announcements are that you can find out exactly when they are going to be, as they are pre-scheduled by the company involved and listed in most of the financial press the week in advance.
So by being aware, you get the chance to watch how the market reacts to the statements as the markets open.
You need to take care with this kind of spread bet in the same way as you would take caution with any bet.
Watch some first before you jump in and invest.
See how the market reacts, and work the trends.
Don't forget, it doesn't matter what you think of the results, it's how the market reacts to them that you need to respond to.
Source...