Ex.3 Read the text below, from Times Online, and answer these questions

1 Find an expression that means 'having a bet'.

2 In which expressions does the journalist indicate that you are likely to lose?

3 Is it true that 'your potential losses are unlimited'?

Are all the examples given in the article about gambling?

Things to know about spread-betting

Once the preserve of City dealers, spread-betting - which enables you to gamble on the direction of shares, commodities or stock market indices - is becoming more popular among ordinary investors, with as many as 150,000 now taking part.

Health warning

Spread-betting is gambling, not investing. You are taking a punt on the future movement (either up or down) of a share price, index or a commodity. Remember that the odds are in the spread-betting company's favour and that your potential losses are unlimited.

Tax break

As spread-betting is gambling, all profits are free of capital gains tax - that's if you make any profits, of course.

How it works

The spread-betting company will quote a bid (selling) and offer (buying) price for the FTSE 100 index, say 5,016 and 5,018. The difference between these prices is the spread. If you think that the index will rise, you might 'buy' at £10 a point at 5,018. If you allow your bet to run until the market's close and the FTSE rises to 5,053, your profit will be the difference between the closing price of 5,053 and the opening price you were quoted (5,018) times £10, giving a total of £350. If you wanted to bet that the market will fall, you would 'sell' at 5,016, hoping that it would drop below this level.

Pain barrier

Set up a 'stop-loss' limit, which will close your trade at a set level if the price moves against you.

Correct timing

Some spread-betting participants close their trades daily, but you can leave positions for longer. A woman who took out two bets on shares in Google at £1 a point and £2 a point held her positions open for more than two months. She made £27,000 profit.

Risk reduction

Some investors use spread-bets to hedge, or protect, their positions. But the usual risk warnings apply. For example, someone with £10,000 invested in a FTSE 100 tracker fund and who is worried about a fall in the stock market could 'hedge' the position by selling the FTSE 100 index on a spread-bet. If the index closes at 5,386, an investor can sell at £1.86 a point £10,000/5,386). For every point the FTSE 100 falls, the investor will make £1.86 on the bet to cover losses in the tracker fund.

Ex.4 Discussion: Investing, speculating and gambling.

From what you know about stocks, bonds, currencies, futures, options, swaps, and structured products involving combinations of these assets, would you say buying and selling each of them is a matter of:

a investment

b speculation, or

с gambling?

6. TAKEOVERS