Spread Betting Tips for Trading as Centrica Profits Rise

Jul 27, 2012, 02:00 ET from City Index

LONDON, July 27, 2012 /PRNewswire/ --

On Thursday, 26 July, Centrica - owner of British Gas -reported a 15% growth in adjusted operating profits to £1.45 billion for the first half of 2012 as household bills increased by £90 in the first half of the year. Operating profits at British Gas have grown 23% to £345 million.

Looking closely at the news out of Centrica, below we offer you our spread betting tips on placing a trade through a City Index financial spread betting account - for only a small initial deposit.

British Gas Profits Rise to £345m

In Centrica's half-year results for the six months ending June 2012, the owner of British Gas - Britain's biggest energy supplier - said revenue was boosted by the 'colder-than usual' weather between April and June.

Whilst Centrica's gas revenues increased 21% to £3.2 billion in the first half of 2012, consumption rose by only 3.5%.

Centrica's finance director, Nick Luff, said the rise in the six months to the end of June represented a return to normal trading after atypically warm conditions affected profits negatively last year.

The stronger performance at British Gas has helped Centrica's underlying earnings rise by a better-than-expected 14% to £767 million.

How to Spread Bet Centrica Shares

As Centrica's underlying earnings rose following the stronger performance from British Gas - so did its share price.

In early morning trading on Thursday, 26 July, through the City Index spread betting platform the Centrica DFT opened at 308.65p.

By 09:35am BST, the market share price reached 316.35p before stabilising - only to appreciate again at midday to 317.3p.

As an example, let us consider an investor had decided to spread bet the Centrica DFT at 08:00am BST on Thursday, 26 July. With the market available through the platform at a spread of 307.75/308.75 (the sell/buy price), they decide to go long and buy at 308.75 for a stake of £15.

At midday they decide to close out their trade and take their profits. The market is now available for 317.25/318.25.

To close their trade they sell back the market at 317.25.

As a result, they profited a tax-free* amount of £127.50 in four hours as the market moved in favour of their position by 8.5 points for a £15 stake, i.e. (317.25 - 308.75) x 15 = £127.50.

However, had the market moved against their position and fallen by 8.5 points - you'd have incurred a loss of £127.50.

It is important that you remember spread betting is a leveraged product which can result in losses greater than your initial deposit. Ensure you fully understand the risks involved and use the risk management tools available through the City Index website.

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

Start Financial Spread Betting

To start spread betting across a range of trading platforms - including the City Trading mobile application - you can apply for a spread betting account with City Index through their website: http://www.cityindex.co.uk

Read More Spread Betting Tips

If you found this article helpful, you may want to read more just like this. You can access a range of free spread betting tips, guides and articles through the City Index website.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting.

We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk/ for details.

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SOURCE City Index