Hello,
Can anyone point me to a company that offers spread betting on the Alternative Investment Market? I've searched Google and have not noticed anything too obvious except for my underestimation of how many companies offer spread betting services.
Maybe I've missed something but sites found under the following search don't seem to focus on AIM;
TIA,
Ted
No such thing, AFAIK, and I wouldn't expect there to be, either.
In order to offer spread bets, SB companies buy up (or short) loads of shares from the market makers. And they need to trade a *lot* of shares to cover even a moderately-sized SB.
Companies on AIM have a bunch of problems for this: (1) the spread is extremely variable, and often rather wide; (2) AIM shares are often illiquid: the SB company may not be able to trade enough to hedge even a small bet; (3) AIM shares usually have few (perhaps only one) market maker; (4) if derivatives traders (SBs, CFDs, warrants, etc.) traded AIM shares directly, the effect would be to cause such a crazy fluctuation in the underlying instrument's price that they'd skew the market and make it dangerously volatile.
It's hard enough finding SB companies to cover FTSE 250, much less 350 or AIM.
And, frankly, given how broad the spreads would be on AIM, it's probably not a profitable option for you to SB, nor worthwhile for SB companies to offer their clients.
Jon
Jon,
Many thanks for getting back to me.
All the best.
Ted
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