Traders persevere with trying to pick the Footsie and Dow

Spread betting punters are stubbornly trying to short the FTSE100 index and Dow this week, even though that strategy has failed to pay dividends over recent days.

Bookmakers said traders have done better in recent days with short positions on oil, as the December Nymex price has slipped back from $55 to $46 a barrel, and they have also made money on some individual stocks.

IG Index said that the arrival of the FTSE at the 4820 resistance level this morning sparked selling by clients, who appear to believe that the rally has gone far enough for the moment.

Finspreads said its customers are short of the main UK and US indices, but that they have done better on the German Dax, some people buying it just below 4000.

Among the active stocks for spread betting punters have been Bioprogress, Dana Petroleum and BSkyB, all favoured by bulls, and Vodafone, where Finspreads clients have been moving short.

On currencies, IG said punters were selling the dollar despite its establishment of new lows against the euro. One popular trade was to go long of the pound against the dollar, on the hope that sterling might revisit its highs above 1.90 of earlier this year.

Finspreads said that clients were very long of gold, and had made money on the recent advance. They were also long of both the euro and the pound against the dollar.

IG is now quoting spreads the Chicago Board Options Exchange’s VIX index – this measures the volatility of the S&P500 index implied by options prices.

Recently volatility has been declining relentlessly from over 40% in late 2002, to around 13%, or 130 on the VIX index.