Next First Quarter Report Leads to Heavy Spread Betting Action

By mosesbet · Filed Under News Comments Off on Next First Quarter Report Leads to Heavy Spread Betting Action 

The shares of Next, one of the leading retailers in the UK, saw heavy spread betting action after the company came out with its first quarter results.

Next ranks second in the UK’s list of largest clothing retailers. In the last four years, the company has experienced tremendous growth. In 2008, its share price was as low as 780p, and now in April 2012, it has touched 3000p. This track record encouraged traders to expect a further spurt in its share price, with many of them opting for the spread betting route to make bets on the company’s results.

Just before the opening of the stock market, many investors were waiting for Next to declare its first quarter results of this year. Even though the company’s sales in the first quarter went down by 3.9%, its share price went up by 1.4%. Traders clearly have faith in the company and are expecting it to recover lost ground in the next quarter.

Spread betting becoming extremely popular

One reason why so many investors chose spread betting to place bets on the company’s announcement is that it allows investors to earn 100% tax-free profit. Moreover, they can take a call on the result of an event going in either direction.

Some traders have been cynical about Next’s achievements, but many believe that its success will continue. The unique thing about spread betting is that whatever the result – whether shares go up or down – an investor can still earn a profit on the trade. Success in spread betting does not depend on the success of the underlying asset.

Lower margin requirements a big draw

Major spread betting platforms like City Index have a margin requirement ranging from 1% and 10% of the total value of an investor’s position in the market. It should however be kept in mind that with leveraged trading, an investor can easily lose more than his or her total initial investment.

With a low margin requirement, investors only have to deposit a small percentage of the total position that they want to take. This gives them the opportunity to earn a lot more compared to traditional trading, with just a small investment.

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