The London International Financial Futures Exchange (LIFFE) has launched what it terms a "new stock market", giving investors access to the alternative investment strategy of betting on futures. LIFFE is inviting small investors to take bets on the fortunes of the biggest companies, for a fraction of the cost of buying shares.
LIFFE's new product is called Universal Stock Futures and it enables investors to buy and sell futures contracts on 25 blue-chip stocks in the UK, Europe and the US, on one electronic trading platform. These stocks are in key companies in the telecoms, pharmaceuticals, technology, oil and banking sectors.
Until now, trading in futures has been an activity largely put on the back burner and not widely used. It is not possible for retail investors to trade them in the US, although legislation has recently been passed which will lift the ban from August 2001. LIFFE expects demand for the futures to come from the UK and Europe.
LIFFE's key objective is to attract retail clients for the first time. So far, 11 brokers have agreed to provide access to the futures for their private clients. The futures also have eight market-makers. Jonathan Welch, director at ED&F Man International, commented: 'For the first time, private investors can trade the large stocks on a geared basis and with the protection of trading on a regulated exchange rather than over-the-counter'.
LIFFE's chief executive officer, Hugh Freedberg, said: 'Futures is another way of managing risk', adding that investors should be aware that they could lose vast amounts of money just as easily as winning it: 'I would recommend anyone who wishes to trade to do so through their broker or to get advice so they know what they are doing,' he said.
Many enquiries have been made by potential investors interested in LIFFE's new product, but it is expected to take some time to catch on as investors get to grips with using futures to place bets on stock prices.
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment