Hong Kong Stock Market Spread Betting Guide

Hong Kong Stock Market Spread Betting Guide

Hang Seng Spread Betting Guide

arrow_forwardLive Hang Seng Chart
arrow_forwardLive Hang Seng Prices
arrow_forwardWhere to Spread Bet on Hang Seng
arrow_forwardHow to Spread Bet on Hang Seng
arrow_forwardHong Kong Stock Market Just Isn’t Popular


Hong Kong Stock Market Just Isn’t Popular

Why Isn’t the Hong Kong Index Spread Betting Index More Popular?

I’m glad you asked, and putting time zones to one side:

  1. Top of my list… the Hong Kong Index is a tricky on and there’s a rather good reason why people don’t trade it more often… different firms quote different Hong Kong index markets…. e.g. HK 40, HK 43, HK 45 and of course the Hong Kong Hang Seng aka HIS aka HK 50… the number of constituents changes and that doesn’t inspire trading confidence.

    If you want to hear a confused dealer at your spread betting company, call them and ask them how many constituents there are in their Hong Kong index… and when they eventually answer… ask them if they are sure.

  2. Another reason why the Hong Kong stock market isn’t more popular with spread bettors is because it’s often only available as a futures market rather than a daily market… and that often means wide spreads e.g. you’ll often get a 8-12pt spread.

  3. And there are bigger margin requirements / lower leverage. I.e. you may get a 2% margin requirement, i.e. only x50 leverage on the index


Live Hang Seng Chart and Prices





13 December 2017: Is the Kong Kong 50 Going to Hit 30,000?

Below, a 4 minute video taking a quick technical look at the HK50:


22 November 2017: Hong Kong Hang Seng Up 66%!

The Hong Kong 50 index is just seeing higher-highs and higher-lows.

Indeed, the stock market is up 66% since February 2016 and the MACD is showing positive momentum.

But where next? The 5 minute technical analysis video gives an interesting view:



Where Can I Spread Bet on the Hang Seng?

A number of the more established brokers offer live charts & prices on stock markets indices including Hang Seng, e.g.:

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How to Spread Bet on Hang Seng

As an example, let’s suppose you are interested in speculating on the Hong Kong Hang Seng, you go on a spread betting website, such as Spreadex, and see they are offering the live market at:

Hong Kong 40 Rolling Daily: 19969 – 19989

Here’s what you need to know:

Spread Trading Market Hong Kong 40 Rolling Daily
Spread 19969 – 19989
How the Trade Works Now you can speculate on the Hong Kong 40 Rolling Daily market to move:

  arrow_upward  Higher than 19989, or
  arrow_downward  Lower than 19969

This is a Rolling Daily trade and so there is no settlement date for this trade. If you don’t close your position and the session ends then your trade will roll over into the next trading day.

If the trade is rolled over then you will normally either be charged or receive interest for overnight financing depending on whether you are betting on the market to go up or down.

Also see how rolling spread betting markets work.
Trading Units Spread bets on the Hong Kong 40 market are made in £x per point.

Where a point is 1 point of the stock market index’s price movement.

E.g. if the Hong Kong 40 moves by 50 points then you would lose/win 50 multiples of your stake.
Stake per Unit You work out how much you are going to risk per point, e.g. £1 per point, £3 per point, £10 per point etc.
Short Staking Example With that in mind, if you have a stake of £3 per point and the Hong Kong 40 changes by 24 points, you would lose or win £3 per point x 24 points = £72.


Trading Example | Buying the Hong Kong 40

Spread trading on the index to go up in value

You Now Choose Whether to Go Long or Short The Hong Kong 40 moving:

  arrow_upward  Higher than 19989? or
  arrow_downward  Lower than 19969?

Let’s Say You Decide to Go Long   arrow_downward  Higher than 19989
You Select Your Stake, Let’s Assume You Opt For £2 per point
What Happens Now?
  • You will win £2 for each point the Hong Kong 40 goes higher than 19989
  • You make a loss of £2 for every point the Hong Kong 40 moves lower than 19989
When Spread Betting on a Market to Increase Your Profits/Losses = (Final Level – Initial Level) x stake per point
 
Trading Situation 1 The Hong Kong 40 moves higher and the market is adjusted to 20049 – 20069.
Close and Take a Profit? You can decide to leave your bet open or close it to lock in your profit. For this example, you decide to settle your position and sell the market at 20049.
Your Profits/Losses = (Final Level – Initial Level) x stake per point
(20049 – 19989) x £2 per point
60 points x £2 per point
Your Profits/Losses = £120 profit
 
Trading Situation 2 The Hong Kong 40 decreases and the shares spread betting market is revised to 19919 – 19939.
Limit the Loss? At this point, you may choose to leave your spread bet open or close it to restrict your loss. For this example, you choose to settle your position by selling at 19919.
Your Profits/Losses = (Final Level – Initial Level) x stake per point
(19919 – 19989) x £2 per point
-70 points x £2 per point
Your Profits/Losses = -£140 loss


Fully Worked Trading Example | Selling the Hong Kong 40

Online spread betting on the index to move down in value

You Select Whether to Buy or Sell The Hong Kong 40 to push:

  arrow_upward  Higher than 19989? or
  arrow_downward  Lower than 19969?

Let’s Assume You Sell   arrow_downward  Lower than 19969
You Choose Your Stake, Opting for £1 per point
What Now?
  • You make a loss of £1 for every point the Hong Kong 40 moves higher than 19969
  • You will win £1 for every point the Hong Kong 40 pushes lower than 19969
When Spread Betting on a Market to Fall Your Profits/Losses = (Initial Level – Final Level) x stake per point
 
Trading Situation 3 The Hong Kong 40 pushes lower and the spread trading market is adjusted and moved to 19853 – 19873.
Time to Take a Profit? You could decide to let your trade run or close it and lock in your profit. For this example, you opt to close your trade and buy the market at 19873.
Your Profits/Losses = (Initial Level – Final Level) x stake per point
(19969 – 19873) x £1 per point
96 points x £1 per point
Your Profits/Losses = £96 profit
 
Trading Situation 4 The Hong Kong 40 goes higher and the financial spread betting market moves to 20061 – 20081.
Time to Limit the Loss?At this point, you could decide to keep your bet open or close it, i.e. close your spread bet to restrict your losses. In this example you decide to close your trade and buy at 20081.
Your Profits/Losses = (Initial Level – Final Level) x stake per point
(19969 – 20081) x £1 per point
-112 points x £1 per point
Your Profits/Losses = -£112 loss


Hong Kong 40 Notes:

AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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