THE SUNDAY BUSINESS POST
n28 commercial report APRIL 3 2011
SPREADBETTING 2-PAGE SPECIAL REPORT
How spreadbetting can work for you
shares without using a stock- main of the institutions,where- ‘up’ bet, which is also referred risked per point. for the Ftse 100. on a specific date, up to three
By Margaret O’Brien
OVERVIEW broker, and therefore without
paying any commission or
fees.
by individual retail traders can
bet on shares, indices, com-
modities and currencies from
to as a long position or a buy.
If, on the other hand, you
think the particular market
Most spreadbets work on a
daily, rolling or ‘contract
month’ basis.
A rolling bet is one that rolls
through to the next trading day,
unless you state otherwise.This
months later, known as the ex-
piry date or last trading day.
While savvy day-traders
S
preadbetting on fi- As all spread trading profits their PC or more recently their will fall you place a ‘down’ A daily bet is one limited to type of bet involves a cost, and tend to favour daily or rolling
nancial markets is ing as it is also known, is re- are recognised as the winnings mobile. bet, commonly referred to as a one particular trading day.Y ou you ne e d to c onsult your bets, beginners need to exer-
growing in popular- garded as a cost-effective of a bet, they are exempt from It is fairly simple to follow short position or a sell. could place the trade before spread trading provider to ad- cise some caution and are ad-
ity a mong p eople alternative to traditional trad- capital gains tax, income tax how spreadbetting works: if The amount of money you lunch and, if you do not close vise you on the cost, as it differs vised to trade over a longer
willing to invest in the hope of ing in shares. and stamp duty. you think a particular index, make or you lose effectively it yourself beforehand, it will from firm to firm. ti me fra m e to have som e
a handsome tax-free return. It allows you to speculate on Spreadbetting offers access share, commodity, currency or depends on how right or wrong be closed at the end of the trad- A trade opened for a parti- breathing space for the trade
Spreadbetting, or spread trad- the movement of stocks and to markets previously the do- sector will rise, you place an you were and how much you ing day, for example, 4.30pm cular ‘contract month’ will end to turn good.
Learn the ropes with Delta Index
Spreadbetting specialist Delta Index prides more experienced they are
looking to companies, such as
‘‘You can also sign up for
technical trading alerts, a daily
ourselves, that can offer real or weekly market commentary
itself on offering genuine insight into the market insight rather than just
the basics. That is why we be-
or you can just shoot the breeze
with our award-winning sales
business, writes Margaret O’Brien gan our seminar series a num-
ber of years ago to deliver
traders ^ a resource that our
sharper traders make use of,’’
meaningful market insights for said Curran.
our clients. We have brought State-of-the-art technology
P
rivately-owned ners,’’ said Chris Curran, head financial spreadbetting it of- some of the big name interna- is at the heart of Delta Index’s
D elta Index of distribution. fers tax-free profits,’’ he said. tional speakers to Ireland in- offer. In 2005, the company
was launched Delta Index, which is regu- ‘‘We have always placed a cluding Mark Shipman, Dr took the decision to build its
in 2002, which lated by the Irish Financial strong emphasis on education Alexander Elder and Richard own trading technology. Cur-
m a ke s it t h e Regulator, offers both finan- and training. We were the first Farleigh, as well as asking Irish ran cited this as a key mile-
oldest indepen- cial spreadbetting and con- company to offer one-to-one experts to comment on market stone in the development of
dent financial spreadbetting tracts for difference (CFDs) tutorials, and we have set the issues. the business. ‘‘We can respond
specialist in Ireland. Since then (primarily in the German mar- quality benchmark for such tu- ‘‘More broadly speaking, to client requests much more
it has grown to a staff of 20 ket). torials. In excess of a thousand our website contains a host of quickly than our competitors
with more than 3,000 retail cli- ‘‘Trading in these types of le- people have completed our tu- infor mation that has been and it gives us control of our
ents in the Irish and European veraged product has grown sig- torials.They are as popular to- honed over ten years of experi- own destiny,’’ he said.
markets. ‘‘We are committed nificantly in the last decade day as they were when they ence working with clients. It in- ‘‘It also allows us to work
to becoming a worldwide pro- because they offer both traders were first launched. cludes how-to gu ides, with distribution partners all
vider of leveraged trading to and investors a unique combi- ‘‘However, we have also seen brochures, product sheets, around the world, which helps
the private client, both directly nation of flexibility, speed of ex- the market mature in recent FAQs and a very handy risk build trading volumes and cut
and through business part- ecution and in the case of years and as traders become calculator. costs for our clients.The recent
introduction of our new mobile Chris Curran, head of distribution, Delta Index TONY O’SHEA
phone trading te chnology
shows just how far ahead of
the competition we are.’’
Whether it’s down to its use buoyant and the G er man Overall, Curran was confi- spot trends and make profit-
of technology or the range of CFD market has doubled in dent that Irish people were be- able trades’’.
services it provides, or perhaps size over the last year.’’ c om i ng more aware of For those thinking about
both, Delta Index continues to Delta index has experienced spreadbetting as an investment opening a spreadbetting ac-
be a solid player in the Irish a marked change in the trading option. count, Curran suggested that
spread trading sector. patterns of its clients since the ‘‘We have noticed an in- they contact Delta Index, ‘‘be-
‘‘New client numbers were onset of the financial crisis. creased appreciation of the c au s e w e c a n t a l k t h e m
up more than 10 per cent and ‘‘There has been a steady tax-free nature of the service. through everything in a low
the number of active trading move to trading currencies, At the same time private inves- pressure, educational manner
clients also increased last year. commodities and Indices ^ tors have become disillusioned and give them all the informa-
While we are still not back to Dow, Ftse, etc rather than indi- with conventional wealth man- tion they need in order to make
the giddy heights of 2007, the vidual shares. Clients also agement advisors and want to their own decisions’’.
first quarter of this year has trade more frequently and hold make their own investment de- ‘‘There are opportunities to
seen the trend of recovery con- positions for a shorter time cisions,’’ he said. make money in markets at the
tinue,’’ said Curran. period. More recently, March ‘‘It all comes back to oppor- moment, and if you put the ef-
‘‘For us the big prize is the has been particularly busy, dri- tunity,’’ he mused. ‘‘Private in- fort in you can become a suc-
development of our German ven by market volatility with dividuals are s eeking cessful trader,’’ he said.
business, which we launched in some exceptionally busy days opportunities to generate re-
2009. In stark contrast to Ire- around the conflict in Libya turns and they are gaining con- For further information, log
land, the German economy is and the tragic events in Japan’’. fidence in their own ability to on to www.deltaindex.com
THE SUNDAY BUSINESS POST
APRIL 3 2011 commercial report n29
SPREADBETTING
CMC faring well despite turbulent times
‘‘Our trading clients tend to
The financial spreadbetting firm be very direct and honest. I’m
glad to say that,when we asked
enjoyed a lucrative 2010 despite for feedback about our Trader
Afternoons, everyone who at-
the volatility of the markets, tended said they found them
to be very useful, evidenced by
the number of people who keep
writes Margaret O’Brien returning.
‘‘On this basis, we will not
only continue with our Friday
C
MC Markets oil. The fact that oil has been events, but will also open the
Ireland re- at the forefront of people’s office one Saturday per month,
corded its fi- minds because of the unfolding to suit those who can’t make it
nancial year- situation in the Middle East, on Fridays.’’
end last week. which has dominated interna- CMC Markets Ireland also
D e c l a n tional news headlines, has began running regular webi-
Bourke, country manager at helped make it a popular trade. nars earlier this year and has
CMC, reported that the finan- ‘‘In addition, traders believe seen significant growth in at-
cial spreadbetting firm had en- that, because of the volatility, tendance for these educational
joyed steady growth over the there is a lot of opportunity in online events. ‘‘There are
past 12 months. with turnover, trading oil.’’ structured stages to ensure that
trade count and revenue all in- Reflecting on why it had clients who attend all stages
creasing. been such a good year for will finish with a solid founda-
‘‘For any firm operating in CMC Markets Ireland, Bourke tion in trading,’’ said Bourke,
the spreadbetting arena, what said: ‘‘We have a commitment ‘‘and the webinar content is
happens in the markets in gen- to constantly innovate and im- kept relevant by referencing
eral is a key business driver and prove our service and our tech- markets activity the day of the
recent market volatility has nology. For example, our next- webinar.
helped to keep us very busy,’’ generation platform, launched These events, he said, ‘‘have
he said. last November, is delivering proved to be well-liked, espe-
The volatility in the markets, well for clients because it is cially by clients not based in
particularly since the New highly user-friendly and offers the Dublin area, as you can at-
Year, driven by events includ- genuine USPs. Its introduction tend from wherever there is a
ing the widespread turmoil in has definitely contributed posi- computer and internet access’’.
the Middle East and more re- tively to the growth of our cli- Looking to the immediate
cently the earthquake and tsu- ent base.’’ future, Bourke believes that
n a m i i n Ja p a n , h av e a l l One such USP is ‘‘no re- CMC Markets Ireland will
contributed to increased trad- quotes’’. As Bourke explained: continue to gain market share
ing activity. ‘‘A requote is when a dealing based on its quality service, va-
‘‘This level of volatility actu- room is unable to fill a trader’s lue and technology offering.
ally lends itself to short-term order at a specified price, and Declan Bourke, country manager, CMC Markets Ireland: ‘Recent market volatility has helped to keep us very busy’ TONY O’SHEA He expects that this, the fourth
trading, and has offered our the trader is ‘requoted’ a differ- year the firm has been present
traders plenty of opportunity,’’ ent price. CMC Market’s next- in Ireland, will deliver further
said Bourke. But, he warned generation platform has no re- Afternoons back in January to network and to discuss and ‘‘It’s a case of us just opening working in person, where they assists in-depth chart analysis strong growth.
‘‘traders to ensure that their quotes and no dealer interven- and they have been a big hit,’’ exchange strategies. Friday is part of our offices to our clients can engage in peer reviews is also present, ensuring clients In terms of the financial
risk mitigation and risk man- tions, making it stand out said Bourke. ‘‘Targeted at our the perfect day for such events, with appropriate facilities and and swap trading ideas and have every technological ad- markets, Bourke agreed that
agement is well thought-out within the Irish market.’’ existing client base, these take because it marks the end of the tools to support meaningful strategies.’’ vantage available to aid their continued volatility seems
and that they are very disci- Another new departure for place at our offices in Upper trading week, and our clients discussion,’’ said Bourke. ‘‘At Five trading stations are set discussions. Any client with likely. ‘‘To the short-term tra-
plined’’. CMC Markets Ireland has Hatch Street, just off St Ste- are with us for the close of the the heart of this gathering is up and ready for communal their own laptop and a wireless der, volatility is very much a
‘‘The most traded financial been the introduction of Tra- phen’s Green, every second European markets and with the opportunity for our clients use in the room where theTrad- internet dongle is also welcome friend. but it’s a friend that you
instrument by our Irish client der Afternoons. Friday from 3pm to 7pm.They an eye on the close of the US to form a community ^ it’s es- ing Afternoons are held. A to bring their own computer need to keep a close eye on,’’ he
base in February was crude ‘‘We started our Trader present a forum for our clients markets as well.’’ sentially old-school style net- touch-type smart board that along. said.
MarketSpreads tutorials offering know-how Paddy Power leaves the sector
Irish bookmaker Paddy Power is to exit from its spreadbetting and
contracts for difference (CFD) trading business, which it launched
in late summer 2007. The company had used a white label
view by adding: ‘‘We have
While spread trading isn’t for everyone, it can offer plenty of traders who are al-
ready savvy, who understand
product from London Capital Group (LCG) to offer spread trading
to its clients.
At the start of this month, Paddy Power said it was reviewing its
a way to make money from the markets free of the financial markets and for
them, having a funded account
financial spreadbetting business and its contract with LCG. The
company has since confirmed it is to cease this arm of its
capital gains tax, writes Margaret O’Brien in place provides a great op-
portunity to react speedily to
business, and clients were informed by e-mail that their business
with Paddy Power Trader is to be routed to Capital Spreads, a
an opportunity.
British company owned by LCG, in early April.
I
r ish p eople from all torials, personal trading men- erly and fail to have a good ‘‘More and more retail tra-
Clients were advised that they won’t need to do anything,
walks of life are explor- tors and workshops to clients strategy in place,’’ he said. ders are starting to appreciate
should they wish to continue trading with Capital Spreads. ‘‘Your
ing new ways to make a to help them understand the ‘‘But even for those who try the opportunities presented by
account, balance and any open positions will move over to Capital
decent return on their business of spread trading be- but decide it’s not for them, spread trading, and if they ap-
Spreads in early April, and we will update you about this move,’’ a
money, and one such option is fore they begin. they will at least have furthered proach it with respect and
statement said. Those who wish to close their account and have
spread trading. ‘‘We have noticed that more their financial education in the manage the downside before
their balance returned are asked to e-mail support@paddypower-
‘‘They are realising that, of- women are opening accounts process.’’ looking to the upside they will
trader.com or phone 1800-556686 to inform Paddy Power Trader.
ten when they do their own re- with us. Every quarter, we take He believes that what differ- give themselves the best chance
‘‘For some time, we have been evaluating options to further
search, they have as good a a look at our top traders, and entiates MarketSpreads is its of succeeding,’’ McGlade said.
invest in Paddy Power Trader to grow its contribution to a
chance of making or losing this time, one of them is a wo- ‘‘commitment and investment As part of its education pro-
worthwhile level,’’ the company said. ‘‘We have concluded that the
money as when they get profes- man, completely new to spread in education. People who open gramme, MarketSpreads will
balance of risk and reward is not favourable for such an
sional advice and professional tradi ng who joine d a few an account with us will receive hold a seminar highlighting
investment relative to our other opportunities and we are winding
e x e c u t i o n ,’ ’ s a i d Jo h n months ago and has made over guidance on how to create a the Top 10 Winning Strategies
down the service.’’
McGlade, sales and marketing e40,000 trading indices, silver strategy and will learn the ben- for Quarter 1, 2011. The semi-
director of MarketSpreads. companies and assorted other efits of having a disciplined ap- nar will be held next Wednes-
‘‘Spread trading platforms are
free, direct and instant, the
markets. She is very methodi-
cal about how she trades, and
proach, giving them a real
chance to make money.
day, April 6. Call 01-8630400
to book a place and get details
Oil still a volatile trade
trading costs are small and plans her moves with precision. ‘‘If a group wants to find out of other locations where the
With spreadbetting firms reporting that oil has become one of the
there’s no capital gains tax.’’ So far, she has been going the what spread trading is all seminar will be held.
most popular trades among Irish spread traders in recent months,
MarketSpreads had its big- right way, and has done very about, we will happily put on a You can open a Market-
people are now asking if is oil a good bet. Oil is not just an
gest ever volume of trades in well. seminar for them wherever Spreads account with whatever
obsession with Irish retail traders; it is the most traded non-
mid-March after 11 years in ‘‘What is apparent from they like, at a time that suits.’’ works for you, but McGlade
financial commodity in the world. With unrest across the Middle
business. looking at her account is that McGlade said that Irish tra- recommended e500 or e1,000
East and North Africa, oil prices have become increasingly volatile,
‘‘Ac c ou nt nu mb ers are she spent time building a plan der appetites in recent months as a reasonable minimum.
John McGlade, sales and marketing director of rising or falling significantly in a single day.
growing steadily year on year and then executes her trades in had been whetted by silver, ‘‘The important thing is that
MarketSpreads Some 86 million barrels of oil are produced every day, and for
and once people get comforta- a way that manages risk expo- which appreciated in recent you work within your own
traders wishing to speculate on oil, the profit potential is large, but
ble with how to manage the sure within defined para- months, helped by the fact that comfort zone, whether that’s
equally, traders need to be aware that so is the loss potential.
risk side and develop a trading meters. Her performance over silver has many applications. ders when it comes to currency but when world events unfold, e500, e2,000, or e100,000, isn’t
An advantage of spreadbetting in general is that it allows
style to suit their lifestyle, they the past three months exempli- Gold has also proved popular, trades which remain open there is heightened interest in important to us,’’ he said. ‘‘It’s
traders to profit from a falling market as well as a rising one. With a
are ready on an ongoing basis fies how it should be done. She as has oil, which has however through the night.’’ the markets, resulting in big about you.
market as volatile as oil, the ability to short sell can be critical, as
to trade their market views,’’ has created a very good strat- been very volatile. McGlade cautioned traders trading days. But as a retail tra- ‘‘Don’t forget: it’s completely
it provides traders with more opportunities to react effectively to
McGlade said. egy and has stuck to it.’’ ‘‘Trading on currencies and to be careful when trading on der, you need to educate your- scalable, and that’s what’s so at-
sudden price movements. That said, because spreadbetting is a
MarketSpreads places a McGlade acknowledged indices has also been strong ‘news’ because the markets will self properly before diving in.’’ tractive. So, if you can turn
leveraged product, you can lose more than your initial deposit.
huge emphasis on education. that spread trading was not for over the past three to four usually get there first to make He insisted that newcomers e2,000 into e2,500, there’s no
Additionally, with spreadbetting your trades are monetised in
‘‘The difference between everyone. months,’’ McGlade said. ‘‘We the necessary adjustment. He should take their time, have a reason why you couldn’t turn
your base currency rather than the underlying market currency –
success and failure when it ‘‘Those who don’t make are the only Irish-owned com- is also wary about cashing in strategy and adhere to it, rather e40,000 into e50,000.’’
typically US dollars for oil – so your exposure will only ever be in
comes to spread trading is of- money often simply don’t have pany with a 24-hour trading on volatility. than being sucked into specific
euro. This makes planning your entry and stop loss points simpler
ten down to education,’’ he the right trading instincts; they desk, based in Dublin, and that ‘‘Markets will always be world events. For further information,
than if you had to factor in foreign currencies and exchange rates.
said. ‘‘We offer one-to-one tu- don’t read the markets prop- is a big advantage to our tra- there regardless of volatility, However, he balanced that visit www.marketspreads.ie