Spread Bettors in Short Positions Pay Dividends as JP Morgan Slips 2%

LONDON, May 15, 2012 /PRNewswire/ --

Spread betting professionals holding short positions on JP Morgan may find themselves in a very fortunate position, netting a tidy profit as one of America's largest banks struggles to find favour among investors following its $2 billion 'trading blunder'.

JP Morgan's latest trading loss has already claimed its first victim, CIO Ina Drew, after claims emerged that a poor trading strategy by an employee under her supervision cost the company heavy losses.  

More pain for JP Morgan?

The bank suffered significant falls in its share price, losing around 2% during the trading session on Monday, May 14. This latest loss is almost certain to cause further pain for the bank, amidst fears among that it could open up a can of worms as critics call for tighter regulations for banks.

Time to go short on the bank?

If JP Morgan's stock prices continue to fall, it could present spread betting professionals the ideal opportunity to net a profit by going short on JP Morgan stocks. Spread betting is a tax-free* alternative to conventional trading, enabling traders to profit from rising as well as falling share prices.

With spread betting, you go long if you believe that the price of a particular instrument, JP Morgan for instance, will rise in the coming days, and you go short if you believe that bank's stocks will fall in the near future. If you were right and prices move in the direction you had indicated, you make a profit; else you make a loss.

By going short on JP Morgan stocks, you could profit from any downward swings in the company's share price in the coming days, should the controversy deepen for the beleaguered bank. Alternatively, those who believe that the worst is over for JP Morgan, could take a long position on the company's shares. Any increase in JP Morgan's shares would then net them a spread betting profit.

Find out more about the benefits of spread betting with Finspreads.  

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

*Spread betting is currently exempt from UK stamp duty and Capital Gains Tax (CGT). However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.

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.