Stocks Analysis

Spread betting is a risky game of trading in which you can lose more than you have in your account. That's because of leverage. Every time you buy or sell a market, you just need a small fraction of your total trade – a margin, which can be as low as 1-2%. If the market goes against you quickly, then you could be in trouble. That's what most people think – but are they correct? Spread betting has in fact some risks, and losing more than what you have in your account is a real possibility, but depending on your provider and on the type of trades you carry, it can be a really low one. Before going broke, there is a margin call trigger, in which most providers will automatically start closing positions you have in your account until the margin is again satisfied.

The following is an excerpt taken from a model portfolio strategy update issued to clients April 4, 2011 at 6pm.  “Texas Instruments Incorporated (TXN) and National Semiconductor (NSM) today announced they have signed a definitive agreement under which TI will acquire National for $25 per share in an all-cash transaction of about $6.5 billion…The boards of directors of both companies have unanimously approved the transaction.” That price is nearly double the $14.07 it closed at today.  This should have a positive impact on semiconductor stocks tomorrow. NSM ranked high for Relative Value but Analyst Revision Momentum was poor.  Perhaps this is the new template for technology acquisitions.  If so, perhaps should keep a close eye on ReneSola Ltd. (SOL) and Micrel Inc. (MCRL), which rank similarly to NSM in Relative Value and Analyst Revision Momentum but better in in Operating Momentum and Fundamental Quality. With the first sell side commentary we have seen on this deal, Barron’s writes that Miller Tabak “sees Fairchild Semiconductor...

CNBC Options Action's Brian Stutland talked on the show about an options strategy in The Coca-Cola Company (NYSE: KO). He said that The Coca-Cola Company (KO) is at its multi-year high, but he thinks that it has lagged behind the rest of the Dow Jones Index components. He thinks that KO will be able to pass to consumer any rise in the cost of sugar. Brian Stutland wants to buy a call spread in KO. He wants to buy the May 65 call for $3.00, and sell the May 70 call for $0.40.