The Credit Crunch and Banking Shares
|
|
|
An interesting report from paddypowertrader trader has landed on my desk. Despite spread betting having a reputation for catching investors out in extremely volatile markets the Irish firm has reported a 110% increase in clients placing equity trades in the past few days
Recent international market turmoil in the banking sector seems to have encouraged speculation rather than scare traders off.
To confirm the fact we asked Financial Spreads if they had seen an increase in activity. They had. Both from existing investors and speculators looking to open a spread betting account.
But is this sensible? What should we do after the Lehmans crash? The FTSE 100 has already broken the 5000 support level a number of times. According to Simon Denom of Financial Spreads “Investors will be hoping that the bounce from this level will support the view that a low has been reached but, in truth, the sensible thing for traders to do in the current scenario is to baton down the hatches, conserve your cash, and wait for the winds to die down. Many shares look extremely good value at current prices but I am sure that investors in Northern Rock, Merrill, Lehman and Bear Sterns thought the same thing just before they failed”.
I will take that as advice not to trade but what is the reality?
Advert
Financial Spreads
Spread Betting - No Fees, No Commissions, Free Charts and Live Prices.
Spread Bet on Indices, Forex, Commodities, Shares and more. For details see Financial Spreads.
|
According to Davin McAnaney over at paddypowertrader “Compared to an average day we have seen an increase of 110% in banking shares trades, as well as those short selling both the UK and US indices. At the top of the list of those being traded are Merrill Lynch, AIG, Allied Irish Bank, Anglo Irish Bank, Barclays and Alliance and Leicester”,
“We have seen a huge increase in the number of trades compared to regular trading activity. Even though volatile markets such as these are difficult to predict, we have also seen a glut of clients taking profits from short selling the rapidly changing markets. US lenders Fannie Mae and Freddie Mac were the subject of nationalisation last week, but before they bowed out of the market they earned spread bettors going short quite a lot of money”.
Well it seems like the one place you should put your money is into your local spread betting company, they seem to be booming. However if that does not suit your needs then according to Denom, “In the current state of play the safest place for cash is no longer cash. Yields on AAA Short term Government Debt are falling like a stone as investors pull funds from the banks and search for a safer home. Oddly enough Northern Rock is now, probably, the safest place to have your hard earned in the UK”.
So it looks like we will be seeing more queues outside Northern Rock then.
"The Credit Crunch and Banking Shares" last update by RThomas, 19-Sep-2008
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
Similar articles:
Spread Betting on Shares - last update: 17-May-2012
Spread Betting on Shares - which spread betting companies offer spread betting on shares, live shares spread betting prices and shares charts, plus how to spread bet on shares and . . . read more - Spread Betting on Shares.
Financial Spreads Still Trading Whilst Trading is Suspended at the LSE - last update: 25-Feb-2011
With trading at the LSE still suspended a number of spread betting companies like Financial Spreads are still offering trading on the UK markets. Financial Spreads are also offering . . . read more - Financial Spreads Still Trading Whilst Trading is Suspended at the LSE.
Spread Bets and Factors That Can Affect Shares - last update: 17-Feb-2010
The essential underlying feature of a stock exchange is that there is generally no fixed price for any stock. A company's shares are valued by the sum of trading actions that constitute its worth over a . . . read more - Spread Bets and Factors That Can Affect Shares.
Spread Betting, Shares and Dividends - last update: 16-Feb-2010
From a company's point of view, one of the main benefits of having its shares traded on a stock exchange is that it can help to raise capital. Private companies often enter the stock market in order to . . . read more - Spread Betting, Shares and Dividends.
Oil Spreads - last update: 01-Feb-2010
Oil Spreads >> Despite the oil market being at a recent high, at the moment crude oil continues to be a dangerous market to bet against. There is room to both the upside and also the downside and the markets are very volatile at the moment. This is particularly true around the weekly oil inventory numbers . . . read more - Oil Spreads.
Spread Betting and Tax Free Trading - last update: 14-Jan-2010
Spread Betting and Tax Free Trading >> Diversification of assets, tax efficiency and opportunities in volatile markets are all key areas for many investors. Most of us could benefit from a little more research and . . . read more - Spread Betting and Tax Free Trading.
Trading the FX, Shares and Commodities Markets - last update: 14-Jan-2010
Trading the FX, Shares and Commodities Markets >> As the major economies start to stabilise and the risk of a depression fades into the distance many are reflecting on a few important points. Firstly, how did it . . . read more - Trading the FX, Shares and Commodities Markets.
Trading the Financial Markets after a Recession - last update: 12-Jan-2010
Trading the Financial Markets after a Recession >> So it looks like we have avoided a 1930's style depression however the current forecasts still suggest slow growth and a difficult time ahead. So what should you do in a difficult . . . read more - Trading the Financial Markets after a Recession.
Spread Betting Advantages - last update: 12-Jan-2010
Spread Betting Advantages >> Spread trading offers some interesting features and is worth considering as part of your investment strategy. There are many benefits. For example, spread betting profits do not incur . . . read more - Spread Betting Advantages.
Balancing a Share Portfolio for a Recession - last update: 24-Sep-2009
Of course, in reality, financial spread betting is one the few industries that is thriving in the current market conditions. There may be a temporary ban on betting on Financial Stocks to go down but you can still bet on thousands of . . . read more - Balancing a Share Portfolio for a Recession.
Short Selling Ban Lifted - last update: 16-Jan-2009
The short selling ban has been lifted. Genuine long-term investors should have no fear over short selling as they are supposed to be in the game for an extended term and are buying on yield, prospects, growth etc. Why worry if investors are spread betting on a market to go down? The fact that the stock has fallen only means . . . read more - Short Selling Ban Lifted.
Spread Betting on Construction Sector Shares - last update: 03-Nov-2008
Building Sector Shares >> Back in the summer Taylor Wimpey's inability to get a fund raiser off the ground really hit the market. At that point we had become used to shareholders routinely stumping up the cash for . . . read more - Spread Betting on Construction Sector Shares.
Shorting Leveraged Companies and the Economy - last update: 28-Oct-2008
Shorting Leveraged Companies and the Economy >> There is now some in-depth research going on with analysts looking for stocks with higher than normal borrowing requirements. The 'dodgy' gearing up of balance sheets over the past decade may . . . read more - Shorting Leveraged Companies and the Economy.
Banking and the UK Economy - last update: 20-Oct-2008
Banking and the UK Economy >> Irish banks which were virtually the first recipients of State support are now pretty much at their lowest levels. They are even under the prices that triggered the intervention in the first place. With no shorting of financial shares via . . . read more - Banking and the UK Economy.
Where to Invest During a Recession - last update: 01-Dec-2008
Where to Invest During a Recession >> With time to do nothing it seems that a large enough percentage of the population reverts back to the old vices of drink, gambling and . . . read more - Where to Invest During a Recession.
Should Investors be Allowed to Short Shares? - last update: 22-Sep-2008
Should Investors be Allowed to Short Shares? >> Looking at the Alliance and Leicester / Satander deal there has been a slightly different reaction. No one felt sorry for traders shorting via borrowing stock, placing CFDs, spread betting or otherwise. There was a lesson for everyone on the Friday that the possibility of a deal was announced. Some £150m was probably lost in just a few minutes by . . . read more - Should Investors be Allowed to Short Shares?.
The Credit Crunch and Banking Shares - last update: 19-Sep-2008
Spread Bet on Banks >> What should we do after the Lehmans crash? The FTSE 100 has already broken the 5000 support level a number of times. According to Simon Denom of Financial Spreads, 'Investors will be hoping that the bounce from this level will support the view that . . . read more - The Credit Crunch and Banking Shares.
Spread Betting on Banks - last update: 19-Sep-2008
Spread Betting on Banks >> If banks continue to maintain or even raise their already high dividends is that a 'weak signal'? The banks have sources of income other than sub-prime mortgages and, whilst growth may be difficult to come by for the next year or so, the other areas are . . . read more - Spread Betting on Banks.
|
|
|
Free Financial Email: Latest Spread Betting Offers and where to find narrow spreads.
Click here to sign up.
|
|
