For a change from the usual markets, have you ever considered spread betting Belgian shares? Many of the spread betting companies give you access to international markets, including that of Belgium, and this means it is a simple task to make money from shares in foreign countries going either up or down.
For example, IG Index is currently quoting Anheuser-Busch InBev NV for a daily rolling bet at 4225.8 – 4236.2. This means you can either take a bet that the price will go above 4236.2, or that the price will go below 4225.8.
Say that you think the share price will go up as more and more people turn to drink in the current economy, you can place a bet in your local currency, pounds sterling, on the euro price of the shares. Perhaps you would bet £2.50 per point that the price is going up.
Your bet is placed at the buying price of 4236.2. A little later, you see that the quote from IG Index has gone up to 4306.5 – 4316.9, and you decide to close your bet for a profit. Your bet closes at the selling price of 4306.5.
Here is how you work out how much you won: –
- you opened your bet at 4236.2
- you closed your bet at 4306.5
- that means that you gained 70.3 points
- your bet was £2.50 per point
- so you won 70.3 x £2.50 = £175.75
Sometimes the bet won’t work out the way you want it to, and you have to cut your losses before they become too great. Say that the quote drops to a value of 4210.6 – 4221.0, and you decide to close the bet to preserve your capital.
This is how you work out how much you lost: –
- you opened your bet at 4236.2
- you closed your bet at 4210.6
- that means that you lost 25.6 points
- your bet was £2.50 per point
- so you lost £64
Looking at another Belgian company, Umicore is quoted at 3094.4 – 3131.7, a futures based bet six months out. Umicore is an international company and one of the world’s largest materials technology groups, with its headquarters in Brussels. Say you think that over a period of months the price will go up, you can place a futures bet and hold on without any of the niggling interest charges that you get with a daily rolling bet – it’s all built into the spread.
You place a bet for £6 per point at 3131.7, and bide your time. While you make sure that the price does not go down too far, forcing you to cut your losses, you also watch the price creep up until it reaches 3329.2 – 3361.5. You close your bet and count up your winnings.
You entered your bet at 3131.7, and closed at 3329.2, meaning that you gained 197.5 points. At a stake of £6 per point, that’s worth £1185.
Once again, the bet could have gone down to a point where you would need to cut your losses and close the bet. Say it went to 3050.1 – 3063.7. You would lose 3131.7-3050.1 points, which is 81.6 points. For your given stake, that means you lost £489.60.
How to Spread Bet Belgian Shares
It can be fascinating to take part in markets that you would not have considered previously, by using the capability of spread betting to make money on virtually anything. One such example is spread betting on Belgian shares. Buying the shares directly would require you to locate a share dealer prepared to offer you an account, and to use euros for the transactions. If you have a spread betting account with one of the major spread betting providers, you will find you have access to a number of Belgian shares, and can make a spread trade on their movement very easily.
Having said that, many companies are international nowadays so there are several ways to take part in their profits or losses. You simply have more choice with spread betting. For instance, Belgium is well-known for producing a lager called Stella Artois, and the company Anheuser-Busch InBev NV is the current maker of this and many other brands. As you can tell from the name, there have been mergers and acquisitions in the brewing industry, and this company now includes Budweiser, Michelob, Bass, and other international beers in its range. Stella is also brewed in the UK, Australia, South America, and the Ukraine.
But there are other smaller companies that have not sought to expand their operations, and these will represent a pure Belgian market play. Either way, because of the universal applicability of technical analysis you can break down the likely winners, whether from increasing prices or from falling ones, and place your bets on Belgian stocks to make a profit.
Having said that, it is best if you do not simply approach spread trading on Belgian shares as a purely numbers game. While it may have little to do with identifying an entry point, or determining the amount of your bet, you should have at least a passing knowledge of what any particular company does, and how they are viewed in the marketplace. This can help prevent any unexpected surprises.
Take some time to follow the markets, searching for the information online and looking at various time periods of historical prices. This will help you form a better view of the viability and desirability of spread trading in the Belgian market at any particular time. Bear in mind that sometimes markets are not conducive to making profits, and that if the price is neither trending up or down this may not suit the particular strategy that you like to use. Unless you have a tight alternating strategy that requires a sideways moving price range, this type of market is best kept away from.
Finally, as with all good strategies, make sure that the way that you bet on the stock market in Belgium has clearly defined exit strategies. Hope is no substitute for closing a losing bet before it gets any worse, and there will always be losing bets regardless of how good you think that your trading plan is, and however much you “tweak” it. Spread betting is a game of averages, winning more than you lose, and that is the path to success.