Financial spread betting is a method of profiting from the movements of shares, currencies, stock markets, commodities or just about any financial instrument you can think of. The way you do this is by making an agreement with a stockbroker or spread betting company that if a share price moves a certain amount they will pay you; but if it moves in the opposite direction, you pay them. 

You often see financial spread betting explained by comparing it to regular betting. With spread betting you make a bet on the share price in much the same way you would bet on a sporting event: i.e. you bet the number of £s per point you wish to collect should it go up and likewise this is what you lose should it go down. Spread bets generally expire at the end of the day so if you don’t call the bet off before the end of the day the winnings are calculated when the markets close.

Financial spread betting explanation guides

In order to help explain financial spread betting to newbies we have put together a number of guides.  As the site develops more guides and tutorials will be added so keep an eye on the page.

Financial spread betting for beginners

This is the first step to get you started. The article takes you through the concepts and jargon. It gives an outline of the advangages of spread betting over other forms of financial trading.

Financial spread betting tutorial

Now that you understand the principles you’re ready for your first tutorial. This article takes you through the steps required to make a trade or bet: from how to decide what to bet on to actually placing your order. You will learn how to calculate your stops and limit orders.

Spread betting demo accounts

Once you have learned how to make a bet the next stage is to try making your own trades with a demo account. Find out how to start up a simmulator account to start betting with pretend money.

Strategies and techniques

This will give you some guidance on what tactics are successful in financial spread betting and what strategies to avoid.

Happy reading!

Buying or selling a house is likely to be one of the biggest transactions you will ever make so it is important to get the best price possible and a crucial part of this is timing. So how do you work out whether house prices are going to continue falling or whether they are on the upturn?  You could turn to any of the frequent newspaper articles written on the subject, but the problem with this approach is that journalists like to take particular angles in order to create eye catching headlines. If journalists are to believed, the property market is either about to soar or it’s on the brink of an abyss. The fact is that the picture is always more complicated than that, and is riddled with contradictory signals. This article goes through all the important sources of data that the journalists consult so you can better get an idea of what’s going on in the UK housing market.

House price indices

Land registry

The land registry is the official government body that collects statistics of all house sales in England and Wales. Each month they publish how much house prices have risen or fallen and break this information down into regions and local councils. They are also  by property types: flats, detached houses etc. These figures are probably the most reliable because they are based on all property sales rather than a sample. The problem however is that by being so thorough, the figures take 6 to 8 weeks to come out, by which time they are a bit out of date. 

Nationwide

The Nationwide Building Society produce an index based on mortgages they have approved. Their information is more up to date because it comes out just a few days after the month they are reporting on. However, although their data is a reliable indicator, you should remember not everyone buys a house with a mortgage.

Halifax

Halifax Building society, now part of Lloyds Group, is the country’s biggest mortgage lender. The Halifax somehow manage to publish their index a few days before the month is up. They apply a statistical technique of averaging data over three months to smooth out any blip in a particular month. The Halifax tend to have more customers in the north of the country, which is one reason why their data can differ from that of the Nationwide.

Another couple of sources worth keeping in touch with are those produced by HomeTrack.co.uk and the Financial Times, who commission their own house prices index. Although all the above  indices will give different numbers due to the different ways they are calculated, they are rarely far out, and taken overall will provide an excellent guide as to the direction prices are moving.

Other important indices

RightMove.co.uk

One of the most important market summaries is that produced by rightmove.co.uk.  They have 90% of all UK properties featured on their site and on the third monday of each month they produce a house prices report based on on the information they gather on house prices.  They don’t have access to what properties actually sell for but they are able to give an analysis of asking price trends.  There write-up is thorough and a must read for anyone tracking the market.

Royal Institute of Chartered Surveyors (RICS)

Surveyors are the people that value a property when when a sale is made.  This means they uniquly have their finger on the pulse of the housing market.  The RICS monthly report is highly rated in the media. The report gives in depth analysis on the number of sales and also the number of people  showing interest in properties.  When a change in the market occurs RICS are often the first to notice.  Because they work closely with estate agents there insights are close to what’s happening on the ground.  However bear in mind that they have a vested interest in a buoyant market and tend to talk down any negativity.

Regional variations

You should bear in mind that UK wide figures may not tell the whole story about your region. They give overall trends but there can be a lot of variation around the country. Here are some facts about each of the regions:

• Northern England - with a declining industrial base this area has a slower economy and lower house prices. In a boom it is the last area to go up and the first to come down in a slump.
• South East - a much more resilient economy combined with a shortage of land means house prices are generally buoyant.  
• South West - a large number of second homes means that house prices are higher than the local economy would suggest. Prices can tumble when things get tough as it is usually the second home that goes first.
• London - a larger proportion of active foreign buyers means that London can be insulated from the worst of a domestic recession. A lower exchange rate will attract even more overseas buyers, which also can increase prices.
• Wales - has a high proportion of public sector workers, so the local economy - and hence house prices - is susceptible to the level of government spending.
• Scotland - house prices have traditionally been nearly half that of the average English home. Being so remote from London they are less affected by the booms and busts.

Mortgage approvals

Another measure of the health of the market often quoted by journalists is the number of mortgage approvals. When there is an increase in the number of people applying for and being approved for mortgages it is a sign that there will be an increase in the number of buyers over the next few months. Looking at mortgages is good because it is an indicator of what buying patterns will be in the near future. Economists say that for UK house prices to remain stable it requires a level of around 100,000 mortgage approvals per month. Higher than this and prices are likely to rise. Lower and prices fall.  

The main source of this information is from the Council of Mortgage Lenders. They publish monthly figures giving the total number of mortgages approved by all regulated mortgage lenders. The Bank of England also keep track of this data and publish their own figures on lending.

Unemployment statistics

The next big influence on house prices is the rate of unemployment. As people lose their jobs they are unable to pay high mortgage costs thus forcing house prices down. As unemployment spreads even people in secure jobs start to feel cautious about taking on a big financial commitment and may stay out of the market or downsize. Keep track of unemployment be looking at the government online statistics.

Interest rates

The affordability of a home is dependent on the mortgage repayments, which in turn is dependent on the interest rate charged. Fixed rate mortgages are still relatively rare in the UK so mortgages are affected by movements in the Bank of England base rate. Typically an average mortgage will be a few per cent above this, although when the base rate dropped to near zero at the end of 2008 mortgage rates did not follow closely.

Since the credit crunch interest rates have been cut across the board and while that is good news for borrowers, savers are posed with the problem of how to secure a good rate of interest for their hard earned savings.  Many will just leave it in the bank where it is and accept what they get, but if you are smart you will shop around to find the best deals available.  If you are smarter still you will seek new ways of getting the best returns.  This article aims to give you some imaginative ideas you may not have thought of.

The holy trinity of investing

The first thing to appreciate about savings is that there are 3 features to any investment you may make.  These are-

ACCESSIBILITY - how easy it is to get at your money

SECURITY - How safe is your money

PROFITABILITY - how much interest you earn from your money

In any investment, which includes earning interest in a bank, you cannot benefit from all 3 of the above elements. There is nowhere in the world you can put your cash which will give you immediate access, complete security and the highest rates of interest.  You can however, have 2 out of 3. So if you want high interest then you will need to either compromise accessibility or take a higher risk.

If you are prepared to accept not having easy availability to your money then you could consider a limited access savings account.  There is a whole range of these products available spanning from 90 day access to ones that tie-up your savings for a year or more.  In general the longer you tie in, the greater the interest rate.  Mostly you can actually get at your money if you need it but you forfeit the interest accrued if you do this before the end of the tie-in period.  If your interested in this kind of saving make sure you work out very carefully what cash you will need over this period so you won’t need to face this forfeit.

Ever heard of bonds?

If you are prepared to forgo a little bit of accessibility and are willing to take a little bit more of a risk than having your money in a bank then consider government bonds.  When a national government needs to raise money it often does so by issuing government bonds.  You can buy these through a broker or your bank.  The bonds pay a fixed interest rate which is generally higher than that you could get from a bank.  They are regarded as being very safe investments because governments rarely go bust and they can always raise taxes to pay off debts.  

If you’re looking for a higher rate still with a little bit more risk but aren’t prepared to go the whole hog and put your money on the stock market how what about corporate bonds?

Corporate bonds are debt obligations issued by corporations as an alternative to issuing stock when raising capital. The corporation promises to repay the loan at a specified future date and makes semi-annual interest payments to the investor at a fixed rate. Because bonds are senior to stock, interest and principal are paid to bondholders before dividends are paid to stockholders. Corporations are more likely to get into trouble than governments but if you choose well a large profitable company or spread the risk over a few then you should be pretty safe.

Next stop - mutual funds

If the stock market still feels too risky for you but you want to get returns higher than you would with bonds then a mutual fund may be the answer for you.  A mutual fund, sometimes known as a unit trust or an investment trust, is a collection of stocks, bonds and other financial instruments that are bundled into one fund.  It is controlled by a fund manager who buys and sells items to keep the fund maximizing its profits.  Mutual funds are considered safer than stocks because the risk is spread.  Different funds are also rated with different levels of risk depending on how cautious or aggressive the fund manager is.  The yields however are lower than stocks because the fund manager needs to take his cut.  Access is not so easy with many of these as there is can be a fee when you buy in.

Now let’s brainstorm

If none of the ideas above appeal then here is a splash of ideas to make the best of your money.

Investing in objects

Art works, antiques and jewelry have all kept their value very well over recent years.  Of course you have to do your research but if the banks are going to give you next to nothing for looking after your cash then why not enjoy a beautiful painting whilst it gains in value.  You can’t lose (provided it’s out of reach of the kids).

Investing in you

Another way to make your money work for you may be to invest in yourself.  Are there skills you could acquire that would help you move on in your career?  Could hiring a life coach help you get the most out of life?  Think of all the ways you could invest in yourself and see if any of these could bring financial rewards.

Investing in your family and friends

Is there anyone you know who you trust and who needs some cash?  Maybe your best friend is looking to borrow to expand his business.  Maybe you have a son or daughter who has just graduated with heavy student debts.  No sense in them paying the lender high rates of interest when they could be paying you something in-between that would benefit you both.  

Invest in your future

Ask yourself what you are saving for.  If it is something specific then it may be possible to begin putting your money in that direction.  For example if you are saving to retire and build your own house then why not buy the land now whilst prices are relatively cheap?  

- And finally

If you were to ask just about any financial advisor to give a one word piece of advice about investing it would surely be ‘diversify;’ which means don’t put all your eggs in one basket.  If you like any of the ideas above then try and mix it up a bit.  Remember, even governments do very occasionally default on debt and banks can go bust as we now know.