Tag Archives: City Index

Obama Stays in the White House, but How Will the Markets React?

LONDON–(Marketwire/Asianet-Pakistan – November 7, 2012) – Barack Obama has been re-elected as the US President for a second term after a closely fought evening at the polls, narrowly pushing out Republican candidate Mitt Romney.

Investors and spread bettors will now be looking to capitalise on price movements within the financial markets, but can they be sure which way the tide will turn over the next few weeks?

How to Trade Forex following Obama Win

The US dollar immediately fell back in trading on Wednesday 7th November as investors digested the Obama victory as indicating a continuation of the Fed’s easing policy, which has proved to be a negative for the US dollar. As the day progressed, the US dollar then started to recover.

If you believe the US dollar will now fall in value, you could open a long position or ‘buy’ the AUD/USD currency pair, ensuring that for every pip the price moves above your entry point you would stand to make a profit.

However, if the US dollar strengthens against the Australian dollar, pushing prices below your entry point as a result, you would stand to net losses that could potentially exceed your initial deposit.

How to Trade Commodities following Obama Win

Ashraf Laidi, Chief Global Strategist at City Index, stated this week that “The least ambiguous scenario analysis from the US Presidential elections is that a Romney victory would be deemed a negative for gold,” due to the Republican candidate’s foreign policy with regard to China and lack of support for the Fed Chairman Ben Bernanke and his proactive stance on monetary easing.

If you opened a long position on gold, you’d stand to make money for every point the commodity rose in value above your entry point.

If gold prices weakened below your entry point despite the outcome of the US election, you’d stand to make a loss.

If you choose to trade the markets following the re-election of President Obama, ensure you only invest what you can afford to lose and use stop loss orders.

Spread betting, CFDs and forex trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

About City Index:

City Index provides access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting.

Contact:
Joshua Raymond
City Index
+44(0)20-7107-7002
joshua.raymond@cityindex.co.uk

US and UK GDP Data Examined

Government Officials, Businesses and Consumers Will Have Breathed a Sigh of Relief Last Week, When Data Was Released That Confirmed the UK’s Exit From Recession

LONDON–(Marketwire/Asianet-Pakistan – October 31, 2012) – The US followed suit on Friday and posted a 2% rise in GDP, compared to the UK’s 1%.

In the UK, the significant growth in GDP has been attributed to tourist events such as the Jubilee and Olympics, although the FTSE 100 index is still the worst performer out of 8 major equity indices and the only one not to hit a new high for the year.

It’s a similar story across the pond: whilst President Obama will be looking to focus on economic growth in the run up to the election, Mitt Romney believes that the economy is still moving too slowly.

Ashraf Laidi of City Index has commented that the UK GDP data exposes an economic gap filled in by one-off events like the Olympics, and notes that the “manufacturing and construction sectors remain in recession with PMI surveys below the 50.0 level.”

Trading after the GDP Reports

Here’s an example of how to spread bet following the GDP data releases.

In the light of the news, you might believe that the UK 100 will rise in line with the positive economic data. You’re confident that the market will rise and strengthen off the back of these reports, that you place a £10 long or buy position on the FTSE 100 index.

For every point the market moves above your entry point you stand to gain £10. If it moves 10 points in rising momentum for UK stocks, you’d stand to make £100 (£10 x 10pts).

However, if the market moves against you and falls below your entry point, you’d stand to lose £10 for every point it falls and potentially more than your initial deposit if you don’t utilise risk management tools such as guaranteed stop losses.

Ensure you fully understand the risks involved before opening a position.

Spread betting, CFDs and forex trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

About City Index:

City Index provides access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread bet0ting.

Contact:
Joshua Raymond
City Index
+44(0)20-7107-7002
joshua.raymond@cityindex.co.uk

How Will You Spread Bet as Hurricane Sandy Shuts Down US Markets?

“This Is a Serious and Big Storm” – President Obama

LONDON–(Marketwire/Asianet-Pakistan – October 30, 2012) – The hurricane that has investors, meteorologists and even the President spooked has finally hit New York City and surrounding areas.

The storm is expected to cause losses to the US economy to the tune of billions of dollars, and it is the first time the markets have closed due to a weather event since 1985 when US markets were closed as a result of Hurricane Gloria.

Many big players have been affected, including JP Morgan and Citigroup who are advising employees to work from home due to the severity of the storm and lack of public transport.

With all markets in the US currently closed, traders can expect volatility in other markets until New York resumes business — with this in mind, how will Hurricane Sandy affect your spread betting strategy?

It was confirmed on Monday 29 October that the US markets will remain closed until at least Wednesday (31 October), meaning that all US stocks will be off limits to traders.

Insurers have been trading lower in Europe on concerns over rising insurance claims as a result of the likely damage caused to homes and businesses. Ultimately, traders will be looking to mitigate risk until the markets re-open in New York.

Say you believed the Wall Street index will open lower when US stocks resume trading. You could place a spread betting order to sell and go short on the Wall Street with a stake size of £10 per point, which means you would stand to gain £10 for every point the market moves below your point of entry.

However, if you were wrong and the Wall Street moved higher, you would lose £10 for every point it rallied above your entry point.

As spread betting is a leveraged product, you could net losses that exceed your initial deposit. Ensure you understand the risks and be aware the Hurricane Sandy will have created a volatile trading environment.

Spread betting, CFDs and forex trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

About City Index:

City Index provides access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting.

Contact:

Joshua Raymond
City Index
+44(0)20-7107-7002
joshua.raymond@cityindex.co.uk