spread betting

[salvatore]

Hi
I am quite new to spread betting and have a question on the actual spread between buy/sell price. The question is when is the best spread ie is there a time when the spread is at the smallest value between buy/ sell.
The reason I ask is that I recently brought Punch Taverns in which the spread was 6.9.(this was with Finspreads)However this morning I decided to close the position and so at 8am when the market opened I closed the position only to realise the spread was 52pts!! Yes my fault should have checked spread but am still learning. Anyway later on at 9.30 the spread had dropped back to 6.9pts. Therefore is there an approx time in the day when the spread settles down?

Thanks

 

[anley]

Tore

The likely reason why the spread was so wide at 8am is because there is often little business done in these smaller stocks right on the opening, therefore the market-makers in the cash stock will have a wide price. Normally the price that the spread betters quote you is an automatic price off the cash market-makers price.

If say you had waited to say 9am then there would likely be a lot more interest in the cash stock and therefore a tighter market maker spread leading to a tighter spread bet price.

Hope this helps and if you're new to spread betting then this is a good resource site www.learnspreadbetting.co.uk

 

[ChartMan]

Sadly for you, 8am - 8:30/9am is the time when the Market Makers earn their Ferraris...... Spreads are wild as you have found out to your cost. It's not the fault of the SB's.

 

[CityTrader]

Punch is a SETS stock. There are NO market makers in SETS stocks- the price is purely and simply derived from orders. i.e the best bid, and the best offer make the price. The market opens at 8am ( although prices can be input onto SETS from 7.50am) but the chances of getting a close touch price in a less liquid SETS stock like Punch at 8am are very remote.

 

[anley]

City, I get your point but market-makers or market participants, in this case one of the same, so to speak.

 

[salvatore]

Thanks for all your replies, will take note and hopefully not get my fingers burnt next time.