Financial Betting Articles

Another exciting week under our belts and the financial markets are up and down like kangaroos on pogo sticks. Yes, volatility has come in to its own with big moves and more turn-arounds than you can shake a stick out (whatever that means). Fear, suspicion, rumours and greed are unsettling the market players at the moment.

The startling sell off at the start of the week saw equity markets finally start to ‘price in’ the looming threat of a US recession. Many, including the FTSE, fell more than they had since 11th September 2001. In a clear sign of panic, the Fed slashed 0.75% from interest rates on Tuesday, the biggest cut in 25 years. The US government has also waded in with $150 billion of tax cuts to help gee up the economy. As a result, Wednesday and Thursday saw a strong rebound only for it to peter out Friday.

The art of the binary and fixed odds bettor is to trade this volatility. What that means in practice is making money by placing bets where you think the odds or binary price don't give a fair reflection of the probability of an outcome. Timing is also important to make the most of the big swings that are a feature of current market conditions.

The reason for the swings largely boils down to bad news about the US economy. The Fed justified its action by citing the weakening economy, tightening credit conditions, deepening woe in the housing sector and softening of the labour market. The markets were also depressed by unconfirmed rumours circulated that Dutch banks ING and Fortis and a major US hedge fund were all set to reveal big losses connected to the credit crunch.

Sillier shenanigans across the Channel where 'rogue trader' Jerome Kerviel allegedly racked up the equivalent of £3.7 billion of losses for his employer Societe Generale. People complain about the dearth of characters in the ever more serious world of finance, so its refreshing to find out that the French at least are content to keep some jokers in the pack. The losses leave SocGen a possible takeover target for the likes of Barclays.

And so the fascinating financial tale rattles on with seemingly impregnable industry behemoths humbled and going cap in hand to sovereign wealth funds or being gobbled up by their rivals. Billionaire trader George Soros has an interesting take on the story that is unfurling. He takes the line that governments have brought this disaster on themselves by doing everything in their power to alleviate previous crunches. The safety net of tumbling interest rates results in 'moral hazard' with firms and individuals recklessly borrowing more and more. Eventually you see a far deeper crisis that governments cannot solve. Did someone say tumbling interest rates? Keep an eye on how the markets react to the Fed's rate decision on Wednesday.

And when you’ve picked the way the market is going to go, visit ChoiceOdds.com to perk you up with their great range of products that are a chance to win whether markets are sky-rocketing or tumbling into the depths. Enjoy!

Tuesday saw the FTSE trade in a 7.62% rang, dipping below 5400 early on, before rally to finish the day up 161.9 ticks (2.90%).

The DOW’s daily trading range has averaged 421.95 ticks so far this year - last week the average was 590.68 ticks.

The DAX’s woes continued last week with it shedding 6.8% of its value. Since the turn of the year it has lost 15.5% of its value.

How to spot a rogue trader – shifty eyes, feigns deafness when you ask him how his positions are faring, desk drawers overflowing with unfiled transaction sheets, so incompetent puts shoes on wrong feet.

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