Taiwan Index Spread Betting

The Taiwan Index is a measure of the performance of the stock market in Taiwan. There are many such indices, but the one you can spread bet on with IG Index has the following chart: –

There is a minimum spread bet of £2 per point, and this is to be expected when you take into account the absolute value of the index. As you can see from the chart, this index has considerable volatility and variability. Volatility is evidenced by the fact that many of the candles are fairly long, implying that the price changes significantly, and variability is shown in the different levels at which the index has traded in the past few months.

“Made in Taiwan” used to be a sign that cheap goods of variable quality were being offered, but in the global marketplace the Taiwanese have turned around that reputation, which was gained at a time when Taiwan was in receipt of foreign aid in the 1950s and 60s. Now Taiwan is more likely to be giving foreign aid, and is a major investor in other countries, particularly in the Asian region. It is the number one supplier in the world of custom computer chips, and home to Acer, the world’s fourth-largest computer maker. It has turned around the old image and is part of the modern global economy.

However, as Taiwan is oriented towards exports to the Western world, rather than focusing on the Asian market, it was hit hard by the global economic crisis in 2008. Following this, Taiwan has looked towards Asia and signed a trade agreement with China in 2010. This is had the effect of Taiwan switching its exports away from the traditional markets of the US and Europe to emerging economies, such as Brazil, Russia, China, and other Asian and Middle East countries.

With this background, you can see why the chart has been variable and the economy is grasping at the latest news to see the direction that unemployment and growth will be headed. Taiwan currently enjoys one of the world’s highest standards of living, but the continuation of this is being questioned by the naysayers. It hitched its future to the Western world in the past, but now seems to be planning a greater diversity to avoid such dependency.

If you have done much spread betting, then this news may be interesting to hear. Any time there is an active price chart, with large price moves, there are by definition good possibilities for making a profit. Whether these moves result in an actual profit depends on how easily you can predict the future movement, and for this you need to have an effective trading strategy and strictly implement your trading plan. One of the most important things you can do is to make sure that you have an adequate stop loss plan that will protect your capital, as this allows you to continue trading when others might be knocked out of the market.

Spread Betting on the Taiwan Index Futures

If you have studied the chart of the Taiwan index futures, you might be eager to try your hand at spread betting on it, as it looks like it presents many opportunities for profit. If you are careful in watching your stops, and implementing a proven strategy, then you should be able to make good gains. The current price for the Taiwan index futures is 283.7 – 284.1, and with this low value the minimum bet size is £2 per point.

For a first example, suppose you think that the price will continue to go up, and place a long bet for £10 per point. If you are correct, you might close your bet when the index gets up to 301.2 – 301.6. You can now work out how much you have won.

• Your long spreadbet was placed at a price of 284.1.
• When you closed your spreadbet, the selling price was 301.2.
• The number of points you have won is 301.2 less 284.1.
• The total number of points you have won is 17.1.
• You chose a stake of £10 per point.
• Therefore you have won 17.1 times £10.
• Your total winnings are £171.

Some of the time, your bet will not work out and you will be faced with having to close your bet for a loss, which you should do as quickly as possible once you realize it is not going to win. Say the price dropped to 280.1 – 280.5, and you decided that you must exit the trade and accept your loss.

• Your long spreadbet was placed at a price of 284.1.
• When you closed your bet, the selling price was 280.1.
• The number of points you have lost is 284.1 less 280.1.
• The total number of points you have lost is 4.0.
• You chose a stake of £10 per point.
• Therefore you have lost 4.0 times £10.
• This time you have lost £40 on your bet.

The second example assumes that you think the price is going to fall. Perhaps you place a short or sell bet for £18 per point, which would be at the original selling price of 283.7. Assume that the index falls and you decide to take your profit when the quote is 259.6 – 260.0. The profit calculation is similar to the above.

• The short bet went on at 283.7.
• The bet closed when the buying price was 260.0.
•  Therefore you have gained 283.7-260.0 points.
• A total of 23.7 points.
• Your stake was £18 per point.
• So your total profit is £426.60.

Again, you need to be prepared for the bet to go the wrong way so that you can act quickly to minimize your losses. If the index rises to 286.3 – 286.7, and you close your bet: –

• The short bet went on at 283.7.
• The bet closed when the buying price was 286.7.
• Therefore you have lost 286.7 – 283.7 points.
• A total of 3.0 points.
• Your stake was £18 per point.
• So your lost a total of £54.

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