TD Waterhouse has introduced quarterly bets to its Financial Spread Betting service

Execution-only broker TD Waterhouse has introduced a facility to make quarterly bets within its Financial Spread Betting service. The quarterly bets cover indices, equities, currencies and commodities on both UK and international markets.

The move is a response to the increasing number of investors who are using spread betting to hedge against risk in their portfolios. Angus Rigby, chief executive at TD Waterhouse UK, observes that ‘Although the majority of our spread betting volume tends to be speculators taking long positions, the use of spread bets as a hedging tool is growing. In recent weeks, as markets have fallen, we have seen a surge of activity in short positions on UK, US and European indices.’

He adds, ‘We have added quarterly bets in response to demand from longer-term investors, who tend to hold positions for weeks or months and therefore find quarterly bets easier and more cost effective than daily rolling bets.’

Quarterly bets have a fixed expiry date and, as the name suggests, they remain valid for a specific quarter. Investors have the option of allowing them to be settled for cash at expiry or closing them at any time before the set expiry date. But unlike daily rolling bets, quarterly bets do not incur overnight financing charges, as the financing costs of holding the position are included in the spread.

Rigby concludes that ‘For investors holding positions for weeks or months, quarterly bets are easier and more cost effective to use than daily rolling bets. And to help investors control their risk, the TD Waterhouse Financial Spread Betting service offers a Limited Risk Account, which automatically places a guaranteed stop-loss on every bet. For investors wanting to take greater risks, the Standard Account offers a choice of order types including limits, stop-losses and guaranteed stop-losses.’

Tags: City Index, cityindex, financial spread betting, TD Waterhouse

This entry was posted on Friday, August 31st, 2007 at 2:35 am and is filed under Broker News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.