LONDON, June 27, 2012 /PRNewswire/ --
With City Index, you can trade CFDs on rising News Corp shares following reports that the company is to be split in two.
As an alternative to traditional shares trading, CFD trading allows you to potentially profit from markets that are rising or falling by going long and buying, or short and selling.
With this in mind, investors can also use CFDs - or Contracts for Difference - to hedge their portfolios.
Below, we look at the reports, what it means for investors and how you can trade CFDs on News Corp shares with City Index.
News Corp Shares Rise 2.4%
On Tuesday, 26 June 2012, a report by the Wall Street Journal -39% owned by News Corporation - said that the company would split its entertainment businesses from its publishing businesses.
The move, if confirmed, would put entertainment businesses such as 20th Century Fox and the Fox broadcasting network into one company and publishing businesses such as the Wall Street Journal, The Sun, The Times and The New York Post into another.
According to BBC Business Editor, Robert Preston, the publishing side would make up only 25% of the company's current revenues and 10% of its profits.
Whilst the reports remain unconfirmed (as of 11:53 BST), the suggested division could have and has had a significant effect on News Corp shares.
But why the split? Consider the recent phone hacking scandal surrounding their newspapers; investors were unable to see clearly where the company was profiting, and subsequently, where they were not.
If fulfilled, the split could offer investors clarity and subsequent confidence.
In turn, by segregating the two businesses, the negative pull that publishing has recently had on the entertainment side of the company could be potentially contained.
How do I trade CFDs on News Corp shares?
By trading CFDs on News Corp shares, you are agreeing to exchange the difference between the opening price and closing price of a contract.
As a derivatives product, you can trade on over 10,000 financial markets - including News Corp - for only a small initial deposit. When trading CFDs on News Corp shares, you only need to pay 5% of its full value to place the trade.
Using today's news as an example - the News Corp (AUD) CFD market rose dramatically following reports of a split by the Wall Street Journal.
Had you decided to go long and buy a CFD trade in the News Corp (AUD) market - you would have profited in line with each point the market had risen.
Alternatively, in the event the market had fallen and gone against your buy position - you would have incurred a loss for each point it fell.
Free CFD Trading Tips with City Index
You can access free CFD trading tips, articles and guides online through the City Index website. Updated on a weekly basis, you can find out how to trade CFDs using examples of recent market movements.
*CFD trading is exempt from UK stamp duty. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month in over 50 countries worldwide.
You can access a wide range of instruments including margined foreign exchange, financial spread betting and CFD trading with City Index.
SOURCE City Index