Trade BP Shares

BP (BP.L) About BP is one of the world's largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items. Industry Integrated Oil & Gas Website www.bp.com Trading Options Financial Spread Betting Contracts For Difference Share Dealing / Stockbroker

BP and Market Latest News Yahoo! Finance: BP.L News US House to take up offshore drilling reform bill (Other) UPDATE 1-US regulators demand fix for failed pipeline (Other) WRAPUP 3-BP lawsuits over oil spill take center stage (Other) UPDATE 1-BP denies Texas a cash advance, gets scathing response (Other) Copyright (c) 2010 Yahoo! Inc. All rights reserved.

BP: Financial Spread Betting vs CFD vs Share Dealing Table below compares Financial Spread Betting, Contract For Difference and Share Dealing trading. For simplicity we use the average brokerage fees to calculate the profit/loss if £1,000 available for investment in BP shares (BP share price is 500p). Supposedly, you think that BP shares will go up by 10% in one month. Calculations Spread Betting CFD Share Number of Shares Equivalent 4,000 4,000 200 Shares go up by 10% in 1 month, Gross Profit £2,000 £2,000 £100 Commission to open position (buy) £60 £15 £12 Commission to close position (sell) £0 £15 £12 Total Commission £60 £30 £24 Financing for one month (5% LIBOR rate) £108 £108 £0 Tax (20% band) £0 £372 £15 + £5 (Stamp Duty) Net Profit £1,832 £1,490 £56

BP: Financial Spread Betting and Contracts For Difference (CFDs) are margined (or leveraged) products and let you go long (buy) or short (sell) with BP shares, they are more suitable for short and medium term investments and cover a wide range of markets, including shares, indices, commodities and currencies. Share investing, on the other hand, is a conservative and old way of gaining financial independence and preserving capital. Even though some stockbrokers offer credit facilities it is very rare and not popular amongst private investors.

Risk Warning: Financial Spread Betting and Contracts For Difference (CFDs) are leveraged products and carry a high level of risk to your capital. You may lose more than your initial investment. Share price can go down as well as up and returns on investments are not guaranteed.