Paddypowertrader.com sees an increase in trading of banking equities as market storm clouds gather.  With the markets in turmoil spread betting offers a great opportunity to profit from the large swings in share price.

Paddy Power’s financial spread betting venture, paddypowertrader.com has seen a 110% increase in clients placing equity trades in the past 24 hours. Recent international market turmoil in the banking sector has encouraged speculation among spread bettors according to the online financial spread betting company.

“We have seen an increase of 110% in banking shares, as well as those short selling both the UK and US indices, on an average trading day. At the top of the list of those being traded are Merrill Lynch, Insurance giant AIG, Allied Irish Bank, Anglo Irish Bank, Barclays and Alliance & Leicester.

The eye of the storm still centres on Merrill Lynch and Lehman Bros. These colossal investment banks are being flooded by huge losses accumulated since the credit crunch began. Lehman Bros has filed for Chapter 11 Bankruptcy, bringing over 150 years of the fourth largest investment bank in the US to an end. Meanwhile other banks such as Merrill Lynch, who are to be bought by Bank of America at a cost of $50bn, are still very vulnerable. Spread bettors have really been able to gain from the see-saw movements in the market,” said Davin McAnaney, Commercial Manager of paddypowertrader.com.

“We have seen a huge increase in the number of trades compared to regular trading activity. Even though volatile markets such as these are difficult to predict, we have also seen a glut of clients taking profits from short selling the rapidly changing markets. It’s a good time for spread betting as it offers much more diverse investment opportunities,” he said.

“Savvy spread bettors have been going short or betting against a rise in the prices of banking shares in the past number of weeks. US Housing based lenders Fannie Mae and Freddie Mac were the subject of nationalisation last week, but before they bowed out of the market they earned spread bettors going short quite a lot of money. There are rumours that the top ten banking institutions in the global market have put €70bn into an emergency fund, which says there is still some way to go until this storm has passed,” continued McAnaney.

“The write downs of banking institutions and movement of their shares is definitely hitting the headlines and leading many spread bettors to take a short position in the hope of making profit. The markets are continuing to swing wildly fuelled by rumours that there are many more toxic assets and banking write-downs to come. This means more opportunities for spread betting.” concluded McAnaney.