bet
English translation: "wager"
| 08:40 Feb 23, 2009 |
| English language (monolingual) [PRO] Bus/Financial - Business/Commerce (general) | |||||||
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|  Selected response from: eski Mexico Local time: 08:03 | ||||||
Grading comment
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| SUMMARY OF ALL EXPLANATIONS PROVIDED | ||||
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| 5 | To take a punt on XYZ company being a good investment |
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| 5 | stake |
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| 4 | where you would profit from |
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| 4 | "wager" |
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| 3 | opinion/challenge |
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Answers
8 mins confidence: 
opinion/challenge Explanation: I think bet here means to express an opinion or challenge (give hardships endangering)against XYZ Company |
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2 hrs confidence:
To take a punt on XYZ company being a good investment Explanation: To take a punt / gamble / uneducated guess / chance It is saying; you may not gamble in transactions involving hedging transactions you have to conduct these transactions in a professional and calculated way. Is it a Code of ethics text ? |
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5 hrs confidence:
where you would profit from Explanation: What is being forbidden is action by A Person that entailed him/her gaining financial advantage if bad things happened to XYZ company. This would give them an interest in those bad things happening and might lead them to not act in the best interests of XYZ company. |
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7 hrs confidence:
stake Explanation: To take a stake that would be against XYZCompany. |
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8 hrs confidence:
"wager" Explanation: This clause prevents you from betting or wagering that the value of the investment will fall inorder to profit thereby: there are many devices; spead bets, opening bets, closing bets, etc. . INTRODUCTION. A wide variety of financial and wagering mechanisms have been developed to support hedging (i.e., insuring) against ... dpennock.com/papers/pennock-ec-2004-dynamic-parimutuel.pdf - Páginas similares de DM Pennock - Citado por 27 - Artículos relacionados - Las 6 versiones [PPT] A Dynamic Pari-Mutuel Market for Hedging, Wagering, and ... - [ Traducir esta página ]Formato de archivo: Microsoft Powerpoint Economic mechanisms for speculating, hedging. Financial. Continuous Double Auction (CDA .... E.g. horse racetrack style wagering; Two outcomes: A B; Wagers: ... dimacs.rutgers.edu/Workshops/Markets/slides/pennock.ppt - Páginas similares Warren Buffett’s Hedge Fund Wager - DealBook Blog - NYTimes.com - [ Traducir esta página ]Warren Buffett’s Hedge Fund Wager. June 9, 2008, 8:24 am ... Previous post Geithner’s Plan to Save the Financial System; Next post The Cost of Lehman’s Loss ... dealbook.blogs.nytimes.com/2008/06/09/warren-buffetts-hedge-fund-wager/ - 66k - En caché - Páginas similares Virtual financial market invention - [ Traducir esta página ]Wager transactions, including acceptances and confirmations, are executed ... the value of the financial exposure as being hedged by the hedging instrument. ... www.freshpatents.com/Virtual-financial-market-dt20080320pta... - 31k - En caché - Páginas similares -------------------------------------------------- Note added at 8 hrs (2009-02-23 17:27:51 GMT) -------------------------------------------------- Note: Sorry for the TYPO above: Should read "...spread bets, opening bets,...etc." Saludos :)) -------------------------------------------------- Note added at 8 hrs (2009-02-23 17:28:29 GMT) -------------------------------------------------- Example of spread betting applied to hedging Selling GBP/US$ (as a hedge on a foreign currency transaction) You may want to hedge, or lock in, an exchange rate now for an expensive 'once in a life time' month long holiday to the USA for you and for your family. You know that you are going to spend £15,000 during your family vacation in three months time. You want to hedge that exposure now against any adverse movement in the exchange rate, so you do the following: Opening bet You call a spread betting firm and they are quoting GBP/USD for 3 months time as 15610/15630. You sell £1 a point at 15610 as a hedge for your £15,000 spending money, as you do not want the pound to get any cheaper against the dollar. (i.e. you are betting that the GBP/USD will go down and you will gain £1 for each 'point' it goes down) Closing bet At the time of your holiday, the spread betting firm is quoting 15030/15050. You buy back your £1 and close the bet at 15050, thus making a profit of £560. This will effectively mean that even though the exchange rate had moved against you, the profit from the trade with the spread betting firm has offset this. Closing price: 15050 Opening Price: 15610 Difference: 560 Profit on Bet: 560 x 1 = £560 (Tax Free) Of course, if the exchange rate had moved up, then you would have lost to the spread betting firm, but gained through a better exchange rate for your holiday. Proud to support Capital Spreads, our favourite spread betting company - tight spreads, good customer service, reliable platform Using Spread Bets to Hedge Against Potential Losses in Existing Investments Let's say you have a £7,000 ISA in a FTSE100 tracker fund, and you think the FTSE is going to fall. Rather than get out of the ISA, you could hedge your exposure with a spread bet. Say the index is trading at 5,404. You simply divide the £7,000 value of your ISA by 5,404, which gives you a figure of £1.30 per point. You can then go short on a spread bet by £1.30 a point. If the FTSE does fall - let's say by 8% or so, to 5,004 - you will make £630, which should be the same as the amount you have lost on the FTSE tracker. You can make money from short-term fluctuations, while keeping your capital within an ISA. Another Example of Hedging a Share Portfolio Let me give you another example of hedging a share portfolio. If I have a large exposure to the US or UK stock market and I think that the stock market is set to fall in the short to medium term, I could simply go out and sell all of my shares and buy them back when I think that prices have bottomed. However, buying and selling a portfolio of shares is costly, you have the broker's commission, spread and if your portfolio has done well you will have a capital gains tax liability. The cost of selling a portfolio and buying it back again would be around 7.5% of the total value. The better and simpler alternative is to place a DOWN BET on the FTSE 100 if you have a UK portfolio or the DOW JONES/S&P500 index if you have a US portfolio. So you still hold your shares, but alongside you are running a financial bet. Now that financial bookmakers are also offering individual bets, you can also hedge an individual share, for example: suppose I hold 10,000 BP shares, rather than sell I could place a £500 per point DOWN bet on BP which will protect my share position. Of course here we're not talking about making profit but its good to know what can be done by hedging. I have hedged my portfolio several times to protect me from exchange rate fluctuations. |
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