Kinesis | Contract Types

In addition to traditional investment management we also offer bespoke spread bet services

Kinesis can significantly enhance net returns from exposure to a range of securities, indices and managed strategies, delivering equivalent returns from the same underlying assets, but more tax-efficiently

Contracts executed in a Kinesis trading account can be structured as limited liability contracts, spread bets, options, CFD, option CFDs or any other variety of principal contract.

A contract for difference (CFD) is a contract between two parties, typically described as “buyer” and “seller”, stipulating that the seller will pay to the buyer the difference between the current value of an asset and its value at contract time (If the difference is negative, then the buyer pays instead to the seller). In the Kinesis Trading Account the “seller” is Capital Financial Markets and the “buyer” is the client.

An option is a contract which gives the buyer (the owner) the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price on or before a specified date. The seller has the corresponding obligation to fulfil the transaction – that is to sell or buy – if the buyer (owner) “exercises” the option. The buyer pays a premium to the seller for this right. An option which conveys to the owner the right to buy something at a specific price is referred to as a call; an option which conveys the right of the owner to sell something at a specific price is referred to as a put. Both are commonly traded, but for clarity, the call option is more frequently discussed.

Spread betting is a strategy, where participants do not actually own the underlying asset they bet on, such as a stock or commodity. Rather, spread bettors simply speculate on whether the asset’s price will rise or fall using the prices offered to them by a broker. Key characteristics of spread betting include the use of leverage (although leverage is not necessary), the ability to go both long and short, the wide variety of markets available and tax benefits.

The Kinesis Trading Account enables clients to trade any of the primary contract types above as well as other principal contract types structured on a bespoke basis.

Under all Kinesis contracts, the client lodges cash or assets as margin to the value of the maximum potential loss under their contract(s) so the counter-party can never suffer any shortfall and the client is not required to lodge further cash should asset prices move against the client.

Find out more | Call the Business Development Team on +44 (0) 1624 654230