Betting firm gains on markets' crisis

THE VOLATILE stock markets have boosted business at Irish-based spread-betting firm Worldspreads over the last six months, the company said yesterday.

Worldspreads, which offers financial and sports betting, issued a trading statement yesterday saying that trading has continued to accelerate since its year-end in March.

The company said that the increase in activity was "led by strong new client acquisitions and increased revenues and supported by the continued volatility in markets generally, an historically favourable backdrop for the spread-betting industry".

Clients of spread-betting firms bet on movements in stock prices, market indices, commodities and other investment products without actually buying or taking an interest in them.

They can take positions on the value of these investments going up or down. This means that spread-betters do not have to depend on rising markets to get a return, which is why it is an attractive option when share prices are falling.

Worldspreads is listed on the junior IEX market in Dublin and on London's Alternative Investment Market, and has trading operations in both cities.

Its statement yesterday said that its international arm has delivered an impressive performance. It has rolled out its trading platform in eight languages.

"The board is confident that the company will meet or exceed the challenging targets that it has set for the current financial year," the statement said.

"The directors expect that the recent ban on short-selling financial shares is not expected to have a material effect on the group's profits going forward."

Earlier this year, Worldspreads reported that net income grew by more than 80 per cent to €1.9 million in the 12 months ended on March 31st.

The opening of a new derivatives unit helped drive growth at the company.

Worldspreads took a listing on the Dublin market in May of this year.

The Financial Regulator now oversees spread-betting companies, which were previously licensed as bookmakers.

Unlike conventional, or fixed-odds, betting, where punters risk losing a single stake, spread-betters risk losing multiples of their stakes if results do not go in their favour.