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bet

English translation: "wager"

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08:40 Feb 23, 2009
English to English translations [PRO]
Bus/Financial - Business/Commerce (general)
English term or phrase: bet
You may not engage in transactions involving certain hedging transactions that create an actual or potential bet against XYZCompany.
[what is 'bet' in this context?]
kgas
Poland
Local time: 22:49
English translation:"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.

Selected response from:

eski
Mexico
Local time: 15:49
Grading comment
Thank you very much!
4 KudoZ points were awarded for this answer

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Summary of answers provided
5stake
Andres Pacheco
5To take a punt on XYZ company being a good investment
Gary D
4"wager"
eski
4where you would profit from
B D Finch
3opinion/challenge
Yasutomo Kanazawa


  

Answers


8 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5
opinion/challenge


Explanation:
I think bet here means to express an opinion or challenge (give hardships endangering)against XYZ Company

Yasutomo Kanazawa
Local time: 05:49
Specializes in field
Native speaker of: Native in JapaneseJapanese
PRO pts in category: 31
Login to enter a peer comment (or grade)

2 hrs   confidence: Answerer confidence 5/5
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 ?

Gary D
Local time: 06:49
Specializes in field
Native speaker of: Native in EnglishEnglish
PRO pts in category: 8
Login to enter a peer comment (or grade)

5 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5
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.

B D Finch
France
Local time: 22:49
Specializes in field
Native speaker of: Native in EnglishEnglish
PRO pts in category: 56
Login to enter a peer comment (or grade)

7 hrs   confidence: Answerer confidence 5/5
stake


Explanation:
To take a stake that would be against XYZCompany.

Andres Pacheco
Local time: 17:49
Specializes in field
Native speaker of: Spanish
Login to enter a peer comment (or grade)

8 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5
"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.



eski
Mexico
Local time: 15:49
Specializes in field
Native speaker of: Native in EnglishEnglish, Native in SpanishSpanish
PRO pts in category: 20
Grading comment
Thank you very much!
Login to enter a peer comment (or grade)




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Non-PRO (1): Henrik Brameus


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