tatts shares a gamble - buy the cfd's

IT might be a bet on a bet on a bet, but there's still an opportunity for punters who missed out on the Tattersalls float.

Instead of buying Tatts shares, which brokers think will be a shoo-in for trading at a huge premium when it floats on Friday, you can buy a CFD or "contract for difference".

Since a CFD is a bet on a share, it's hard to think of a better place to start than Tatts. Oh, except Tabcorp which many brokers think is a better stock but that's another story.

There's now a grey market in Tatts shares which means you can buy and sell CFDs before the stock lists.

At IG Markets their price has blown out from $2.90 last week, the prospectus price, to $3.80. So if the punters are right, Tatts will list at more than $3.80, for a premium of at least 31 per cent.

Brokers suggest about $3.60, but based on the CFD grey market, where there are buyers at $3.80, it'll be over $4.

Just as the few investors who got some Tatts shares might sell yes, stag on day one at a profit, the early buyers of the CFDs will be able to stag as well, the way things are going. Or, as with the shares, you can hang on to them if you think there'll be even greater riches.

Mind you, it's not quite the same thing as owning the shares. Like any bet, if the share price goes against you, you lose the lot.

And they don't trade on the ASX, so you could even trade in and out without Tatts having seen the light of day.

But you do get leverage, because for every 1000 CFDs you hold, a one cent rise in the price of Tatts shares translates to a $10 profit. And there's no brokerage or GST either.

The catch apart from being wrong, of course is that the prices are set by IG Markets, which has to find somebody to bet against you. It makes its money by having a wide spread between the buying and selling price. So even though you were right, you may not get the right price.