Terrorists fail to shake spread betting punters

Spread betting punters reckon Thursday’s terrorist atrocities will have little impact on the long term performance of Britain’s leading stock market index.

While markets fluctuated wildly on the day of the attack, yesterday the spreads on the level of the FTSE 100 close on September 15, December 15 and January 1, 2006 had increased slightly compared with the levels at the close of trading on Wednesday.

As with any spread, those with an optimistic view buy the spread for a specified amount of money per point, say £10. They are paid if the FTSE closes above the top level of the spread. Ten points above the spread and they would receive £100. The reverse is true for those who sell the spread.

As our table shows, despite the sharp swings in the level of the FTSE on Thursday, the longer term spreads have recovered and even increased. The bombers’ impact on share prices was fleeting.

IG Index’s Will Armitage said: “What is remarkable is quite how resilient the FTSE has been – we have seen a 200-point recovery in the space of 24 hours and we are 70 points higher then a week ago.

“One can feel a sense of pride that we have returned to a degree of normality despite the tragic losses to London and the best efforts of some sick, depraved individuals,” he added.

Cantor’s David Buik said: “It is quite amazing. These spreads have barely moved from where they were on Wednesday.”

Thursday was a difficult day for spread betting companies, which took some substantial losses from experienced punters, used to playing markets during periods of uncertainty.

However, Mr Buik said the sort of panic that has gripped markets during similar “intoxicating combinations of bad news and uncertainty” was not in evidence.

He said: “What is noticeable about what happened compared to, say, the situation on September 11, is that traders have got much more experienced.

”There will always be some who take substantial losses by panic selling at the wrong point out of sheer fear, but most now don’t. We had one of our punters win £45,000 simply by moving in and out of the market.

“What has been happening recently is that the index has moved pretty consistently in one direction, up, and there has not been a lot of volatility. The volatility on Thursday enabled some people to close their trading positions and take profits.”

Mr Armitage said: “It was an exhausting day but we are pretty much back to normal and everyone coped remarkably well.”

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