How to Spread Bet as S&P Retains UK AAA Rating Despite Fears of Triple-Dip Recession

LONDON, July 30, 2012 /PRNewswire/ --

UK investors received conflicting news about the country's growth prospects over the weekend, with concerns about the UK falling into a triple-dip recession next spring cancelling out any positive effects of Standard & Poor's report, which stated that the country is likely to return to positive growth later this year.

In the following guide, we look at how to spread bet with a Finspreads account following the news.

Positive Outlook for the UK

The S&P has retained its AAA credit rating for the UK and believes that the economy will stabilise and even return to positive growth during the second half of the year on account of the Olympics.

A report released by the Sunday Times, on the other hand, has indicated that the UK is in a real danger of falling back into another recession next spring on account of the deepening eurozone crisis and once the temporary boom caused by the Olympics has ebbed away.

The Sunday Times Report estimates a possible Greek exit from the eurozone in the spring of 2013, which, it says, will impair the UK's growth potential next year and drag the country right back into another recession.

The eurozone crisis has so far been difficult to predict and while Greece's exit from the eurozone continues to appear to be a foregone conclusion by some market analysts, the true timing of such an event remains anybody's guess.

How to Spread Bet Falling Markets

With financial spread betting, it is possible to net a potential profit from the markets irrespective of whether you believe the UK will slip deeper into a recession or hang onto any positive growth spurred by the Olympics boom.

As a spread betting investor, you could take a position on markets such as the FTSE 100 or pound sterling irrespective of whether you expect UK GDP to contract further or expand. All you need to do is determine the direction in which you expect the markets to move in the coming months.

If, for instance, you expected sterling to strengthen against, say, the euro in the coming months on account of a strengthening UK GDP, you could choose to sell euro against the pound by opening a short spread betting position on EUR/GBP. This means that you will profit in line with every pip that the euro weakens against the British pound.

Alternatively, if you expected the euro to rise against the pound, you could open a buy position or go long the EUR/GBP currency pair and you will profit for every pip that the euro rises against the British pound.

If you were right and prices moved in the direction you had expected, you would make a spread betting profit. Alternatively, you would net a spread betting loss.

Find out how to spread bet or learn about the benefits and risks of spread betting with Finspreads.

Summary

Spread betting is a leveraged product which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

About Finspreads:

Finspreads is a leading online financial spread betting firm, offering access to thousands of instruments on the world's financial markets.

The company pioneered fully interactive online spread betting in 1999 and continues to invest in technology to ensure that its service remains amongst the market leaders.