Twitter Spread Betting Guide

Twitter Spread Betting Guide

Twitter Spread Betting Guide

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


Live Twitter Chart and Prices


17 July 2017: Taking a Longer Term View on Twitter?

Here’s one The Economist made earlier…

This is an older (Nov 2014) view on Twitter but it still makes for interesting reading if you want to have a think about the fundamentals of the micro-blogging service. See Economist.com How high can it fly?

The article isn’t that complementary and pointed out that 45% of Twitter revenues went on stock-based compensation (compared with about 15% at Facebook and 8% at Google).

Interestingly the share price has not faired well over the same period.

  • trending_down7 Nov 2014 TWTR share price: $40
  • trending_down17 Jul 2017 TWTR share price: $20

Where Can I Spread Bet on Twitter?

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

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How to Spread Bet on Twitter

For example, let’s say you want to speculate on Twitter, so you go on a spread trading site, such as IG, and get the live quote:

Twitter Rolling Daily: $16.71 – $16.74

Here’s what you can expect from a trade:

The Market: Twitter Rolling Daily
Spread Betting Quote: $16.71 – $16.74
This Means: Now you can take a position on the Twitter Rolling Daily market to push:

  arrow_upward  Above $16.74, or
  arrow_downward  Below $16.71

This spread betting market is a Rolling Daily market which means that there is no settlement date. If you haven’t closed your trade and the trading session ends then your position will automatically roll over into the next trading session.

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

For additional details see Rolling Spread Bets.
Units (Points) Traded: Spread trades on the Twitter market are made in £x per cent.

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

E.g. if Twitter changes by 40¢ ($0.40) then you would win / lose 40 multiples of your stake.
Stake (Trade Size): You choose how much you would like to risk per cent, e.g. £2 per cent, £5 per cent, £15 per cent etc.
Short Staking Example: If your stake is £4 per cent and Twitter moves $0.27 (27¢), you would lose or win £4 per cent x 27¢ = £108.


Worked Spread Trading Example | Buying Twitter

Spread betting on the US micro-blogging firm’s stock to increase

You Now Choose to Go Long or Short: Twitter moving:

  arrow_upward  Above $16.74? or
  arrow_downward  Below $16.71?

You Might Want to Buy:   arrow_upward  Above $16.74
You Choose How Much to Risk, Opting for: £3 per cent
So What Happens Next?
  • You make a profit of £3 for every cent ($0.01) Twitter moves above $16.74
  • Your spread bet loses £3 for each cent ($0.01) Twitter falls lower than $16.74
If You Are Buying a Spread Bet Your P/L = (Closing Price – Opening Price) x stake per cent
 
Scenario 1 Twitter increases and the spread betting market changes to $17.12 – $17.15.
Lock in Your Profit? You may choose to keep your trade open or close it and take a profit. In this instance you choose to close your trade and sell at $17.12.
Your P/L = (Closing Price – Opening Price) x stake per cent
($17.12 – $16.74) x £3 per cent
$0.38 x £3 per cent
38¢ x £3 per cent
Your P/L = £114 profit
 
Scenario 2 Twitter goes lower and the spread trading market is adjusted and moved to $16.42 – $16.45.
Close and Restrict Your Loss? You could choose to let your position run or close it, i.e. close your trade to limit your loss. For this example, you opt to settle your trade and sell the market at $16.42.
Your P/L = (Closing Price – Opening Price) x stake per cent
($16.42 – $16.74) x £3 per cent
-$0.32 x £3 per cent
-32¢ x £3 per cent
Your P/L = -£96 loss


Worked Spread Betting Example | Selling Twitter

Spread trading on the US social networking service to fall

You Choose Whether to Go Long or Short: Twitter to go:

  arrow_upward  Above $16.74? or
  arrow_downward  Below $16.71?

Let’s Assume You Decide to Go Short:   arrow_downward  Below $16.71
You Decide Your Stake Size, Let’s Say You Select: £1 per cent
So What Happens Now?
  • Your spread bet loses £1 for each cent ($0.01) Twitter moves higher than $16.71
  • You make a profit of £1 for each cent ($0.01) Twitter falls below $16.71
If You Are Going Short of a Market Your P/L = (Opening Price – Closing Price) x stake per cent
 
Scenario 3 Twitter drops and the financial spread betting market is revised to $15.78 – $15.81.
Close and Take a Profit? At this point, you can choose to keep your position open or close it, i.e. close your spread bet for a profit. In this example you opt to close your position and buy at $15.81.
Your P/L = (Opening Price – Closing Price) x stake per cent
($16.71 – $15.81) x £1 per cent
$0.90 x £1 per cent
90¢ x £1 per cent
Your P/L = £90 profit
 
Scenario 4 Twitter pushes higher and the spread betting market is adjusted to $17.44 – $17.47.
Time to Limit the Loss?You can choose to let your position run or close it in order to limit your losses. In this instance you decide to settle your trade and buy the market at $17.47.
Your P/L = (Opening Price – Closing Price) x stake per cent
($16.71 – $17.47) x £1 per cent
-$0.76 x £1 per cent
-76¢ x £1 per cent
Your P/L = -£76 loss


Twitter Notes:

  • Financial spread trading market from IG on 28 April 2017
  • Many companies will also give you the option of spread betting on the social networking service in euros/cent and dollars/cent
  • A DFB on the Twitter share price works the same way

AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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