Trade Severn Trent Shares

Severn Trent (SVT.L) About Severn Trent Services is one of the world’s leading suppliers of water and waste water treatment solutions. Headquartered in the US, it has a growing presence in Europe, the Middle East and Asia. The business has three main divisions: Water Purification, Operating Services and Analytical Services. Industry Water Website www.severn-trent.com Trading Options Financial Spread Betting Contracts For Difference Share Dealing / Stockbroker

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Severn Trent: 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 Severn Trent shares (Severn Trent share price is 1400p). Supposedly, you think that Severn Trent shares will go up by 10% in one month. Calculations Spread Betting CFD Share Number of Shares Equivalent 1,429 1,429 71 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

Severn Trent: Financial Spread Betting and Contracts For Difference (CFDs) are margined (or leveraged) products and let you go long (buy) or short (sell) with Severn Trent 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.