Alibaba Spread Betting Guide

Alibaba Spread Betting Guide

Alibaba Spread Betting Guide

arrow_forwardLive Alibaba Chart
arrow_forwardLive Alibaba Prices
arrow_forwardWhere to Spread Bet on Alibaba
arrow_forwardHow to Spread Bet on Alibaba


Live Alibaba Chart and Prices



13 November 2017: More Love for Singles Day

China’s “Singles Day” generated $25bn in revenues for Alibaba, that’s up 39% on 2016.

Here’s a 3 minute look at trading the Alibaba share price:


Where Can I Spread Bet on Alibaba?

Most spread betting brokers will offer markets on the bigger US stocks including Alibaba.

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How to Spread Bet on Alibaba

For example, let’s suppose that you want to trade Alibaba, so you look on a spread trading site, e.g. City Index, and they are offering the live market at:

Alibaba Rolling Daily: $87.93 – $88.05

This is what happens

The Spread Trading Market Alibaba Rolling Daily
Spread Trading Price $87.93 – $88.05
This Means That You can bet on the Alibaba Rolling Daily market going:

  arrow_upward  Above $88.05, or
  arrow_downward  Below $87.93

This spread betting market is a ‘Rolling Daily’ market which means that there is no settlement date for this spread bet. If you decide not to close your trade and the trading session ends then your position will automatically roll over into the next trading day.

Note that if the trade is rolled over then you will either pay or receive interest for overnight financing based upon whether you are betting on the market to move higher or lower.

See guide to daily spread betting for more information.
Units Traded Spread bets on the Alibaba market are priced in £x per cent.

Where a cent is $0.01 of the US stock’s price movement.

E.g. if Alibaba changes by 55¢ ($0.55) then you would lose / win 55 times your stake.
Trade Size You work out your stake per cent, e.g. £1 per cent, £4 per cent, £15 per cent etc.
Brief Staking Exercise As an example, if you chose a stake of £3 per cent and Alibaba moves by $0.32 (32¢), you would gain or lose £3 per cent x 32¢ = £96.


Worked Spread Trading Example | Taking a Bullish View of Alibaba

Spread trading on the etailer’s share to go up

You Now Select Whether to Buy or Sell Alibaba to push:

  arrow_upward  Above $88.05? or
  arrow_downward  Below $87.93?

You Might Decide to Go Long   arrow_upward  Above $88.05
You Decide Your Stake Size, Let’s Assume You Select £3 per cent
Now What Happens?
  • You make a profit of £3 for every cent ($0.01) Alibaba increases higher than $88.05
  • Your trade loses £3 for each cent ($0.01) Alibaba falls lower than $88.05
If You Go Long With a Spread Bet Your P/L = (Settlement Level – Opening Level) x stake per cent
 
Trading Example 1 Alibaba pushes higher and the market is adjusted and moved to $88.58 – $88.70.
Time to Take Your Profit? You can decide to leave your spread bet open or close it, i.e. close your position for a profit. In this example you choose to settle your trade by selling the market at $88.58.
Your P/L = (Settlement Level – Opening Level) x stake per cent
($88.58 – $88.05) x £3 per cent
$0.53 x £3 per cent
53¢ x £3 per cent
Your P/L = £159 profit
 
Trading Example 2 Alibaba falls and the spread trading market is revised and moved to $87.58 – $87.70.
Close and Restrict Your Loss? You may decide to let your spread bet run or close it, i.e. close your spread bet and restrict your losses. In this example you choose to close your trade by selling at $87.58.
Your P/L = (Settlement Level – Opening Level) x stake per cent
($87.58 – $88.05) x £3 per cent
-$0.47 x £3 per cent
-47¢ x £3 per cent
Your P/L = -£141 loss


Worked Example | Going Short of Alibaba

Financial spread betting on the ecommerce giant’s shares to go down

Investors Should Note: Spread betting firms may not allow users to short the Alibaba market until several weeks after the IPO.

You Decide Whether to Buy or Sell Alibaba to move:

  arrow_upward  Above $88.05? or
  arrow_downward  Below $87.93?

Let’s Say You Go Short   arrow_downward  Below $87.93
You Choose Your Stake Size, Let’s Say You Opt For £4 per cent
So What Next?
  • Your trade loses £4 for each cent ($0.01) Alibaba goes higher than $87.93
  • You make a profit of £4 for each cent ($0.01) Alibaba pushes lower than $87.93
If You Are Selling a Market Your P/L = (Opening Level – Settlement Level) x stake per cent
 
Trading Example 3 Alibaba pushes lower and the spread betting market is adjusted to $87.39 – $87.51.
Close for a Profit? At this point, you may opt to leave your spread bet open or close it, i.e. close your trade to lock in a profit. In this case you decide to settle your bet by buying the market at $87.51.
Your P/L = (Opening Level – Settlement Level) x stake per cent
($87.93 – $87.51) x £4 per cent
$0.42 x £4 per cent
42¢ x £4 per cent
Your P/L = £168 profit
 
Trading Example 4 Alibaba increases and the financial spread betting market is revised and set at $88.18 – $88.30.
Restrict Your Loss?At this point, you may choose to keep your trade open or close it in order to restrict your loss. For this example, you opt to settle your bet by buying at $88.30.
Your P/L = (Opening Level – Settlement Level) x stake per cent
($87.93 – $88.30) x £4 per cent
-$0.37 x £4 per cent
-37¢ x £4 per cent
Your P/L = -£148 loss


Alibaba Notes:

  • Online spread betting prices taken from CityIndex on 24 September 2014
  • Most companies also give you the option of trading on the Chinese ecommerce giant in euros/cent and dollars/cent

AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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