FinancialSpreads.com, a UK spread betting and CFD trading company, has added two new differential markets.
Online PR News – 03-February-2014 – London – FinancialSpreads.com, a UK spread betting and CFD trading company, has added two new differential markets.
The new markets offer a convenient way for investors to trade the relative performance of the American and German stock markets as well as the relative performance of the German and French stock markets.
The new futures markets are:
* Wall Street vs Germany 30
* Germany 30 vs France 40
These markets are in addition to the popular differentials that Financial Spreads currently offer:
* Germany 30 vs UK 100
* Wall Street vs UK 100
* Brent crude oil vs US crude oil
The Wall Street index is an index of 30 leading US firms. The Germany 30 and France 40 are indices of the top 30 German and top 40 French firms respectively.
Differential markets offer a convenient way for investors to trade the relative performance of different markets.
---- How They Work ----
A differential market is simply based on the difference between two markets.
If an investor thinks that the US stock market will perform better than the German stock market they could spread bet on the 'Wall Street - Germany 30 differential' to increase.
Likewise, if they thought the German index would outperform its American counterpart, then they could spread bet on the differential to decrease.
For example, if the Wall Street index is at 15747 and the Germany 30 index is at 9312.3 then the difference is 6434.7.
If so, the Wall Street - Germany 30 differential market might be offered at 6432.7 - 6436.7.
This means that Financial Spreads clients can spread bet on the differential getting larger than 6436.7 or getting smaller than 6432.7.
---- Why Use a Differential Market? ----
An investor could synthetically make the same trade by having two separate trades where they are long of one market and short of the other. However, with a differential market:
* There is only one trade and that can make it easier for investors to manage their overall position as well as any trading orders
* The combined spread of two separate trades is wider than the spread of a single differential trade, meaning that using a differential can help to reduce trading costs
According to Adam Jepsen, spokesman for www.FinancialSpreads.com, "Individually, the Wall Street, Germany 30 and France 40 indices are some of our most popular markets.
"Our existing differential markets are also rather popular so it's only natural to create more of these hybrid markets which let clients trade the relative performance of the stock indices.
"These markets can be particularly useful because they mean you don't have to manage two sets of trading orders and don't have to pay twice for the spread."
The above differential markets are monthly or quarterly futures markets and therefore they have a fixed expiry date. The example is based on the 'March' market which means that any positions that haven't already been closed beforehand will be closed and settled on 19 March. Nevertheless, investors do have the option of rolling a futures contract into the next month / quarter for a small fee.
Investors should note that spread betting and CFD trading carry a high level of risk to their capital and can result in losses that exceed their deposit. Spread betting and CFD trading may not be suitable for everyone, so please ensure that you fully understand the risks involved.
---- About Financial Spreads ----
Based in London, www.FinancialSpreads.com offers over 2,500 separate spread betting and CFD markets from one account.
There are no stock broker fees and investors can speculate on a broad range of markets such as the share price of Twitter and Royal Mail. They can also trade forex markets such as EUR/USD, GBP/USD and USD/JPY as well as commodities including crude oil, gold and silver.
Financial Spreads is a trading name of London Capital Group Ltd (LCG) which is authorised and regulated by the Financial Conduct Authority. LCG is a company registered in England and Wales under registered number: 3218125. Registered address, 2nd Floor, 6 Devonshire Square, London, EC2M 4AB.