How strong is Harry's magic?

HOGWARTS School is supposed to be a long way from the materialistic edge of contemporary Western society, but this month there is a lot of money riding on its ability to pull in cinema audiences.

The capitalist cash comes not only in the form of the $120m Warner's subsidiary, Warner Bros, has sunk into the making of Harry Potter and the Philosopher's Stone - but also in the increasing amount spread-betting enthusiasts are staking on the film's fortunes.

On Tuesday, bookmaker Cantor Index was quoting a spread of $82m to $85m for the movie's takings on its first weekend in America (16-18 November) and $220m to $225m for its first four weeks there.

Those spreads imply it will be a huge hit, dwarfing the $63.5m that Disney's Monsters Inc has just achieved in its first weekend, or the $58m that Hannibal took on its debut weekend earlier this year.

Cantor's spread for Harry Potter's first weekend were pushed up smartly on Monday, from an opening level of $72m to $75m, as punters made a stream of up-bets.

Will the witchcraft-to-quidditch film (to be released as Harry Potter and the Sorcerer's Stone in the US) really capture the imagination of young Americans to this extent?

Dominic Crosthwaite, at Cantor, says: 'Clients are trying to weigh up a number of factors. Harry Potter will be released on 4,000 screens in the US - a record. In addition, 120m books have already been sold. On the other hand, there is no big Hollywood star to carry it.' The absence of a Mel Gibson or Julia Roberts might be a handicap in the US, but the cast - including Daniel Radcliffe as Harry, Emma Watson as Hermione, Robbie Coltrane as Hagrid and Richard Harris as Dumbledore - will have plenty of appeal for British audiences.

Cantor was yesterday quoting a spread of £9.8m to £10.2m for takings on its first weekend in British cinemas.

For my phantom bet this week, I am going to be a killjoy and make an imaginary down-bet from $220m for Harry Potter's US takings in its first four weeks, with a stake of £5 per million dollars in box-office receipts.

If the film grosses $250m in that period, I would stand to lose £150 (250 minus 220, times £5), but if the current spread proves to be a bit overdone and it grosses only $180m, I would make imaginary profits of £200.

Cantor's spreads on film takings are part of an attempt by spread betting companies to expand this most flexible form of gambling out of its established markets in finance and sport.

It is a tough challenge. Despite the spread betting interest in Channel 4's Big Brother, most TV and cinema fans are less used to high-risk speculation than private investors or football supporters.

the old grey market test
T IS only five weeks since bookmakers began quoting grey market spreads for mm02, the Cellnet mobile phone business being demerged from BT on 19 November.

Yet, having opened with City Index on a spread of 133-138 at the beginning of October, mm02 shares were down to 79-84 on Tuesday - equivalent to a £5 billion reduction in the market capitalisation of the company.

The market's bearishness about mm02, led by chief executive Peter Erskine, above, reflects reaction to disappointing subscriber figures announced on 11 October and about its Viag business in Germany.

Ashley Tatham, at City Index, says: 'Fortunately for us, most of the trading on the mm02 grey market has taken place at the lower spreads. Not many people made down-bets when the spread was in the 130s.'

As always with spread betting, it is important to shop around for the cheapest opening level. Yesterday, IG Index was quoting 73-78 for mm02, below City's spread of 79-84. That made City cheaper for down-bets and IG cheaper for up-bets.

All grey market bets on mm02 expire at the close of first-day trading on 19 November.

BEWARE: Financial spread betting can seriously damage your wealth. Many bets, unless protected by a 'guaranteed stop', can result in huge losses if events go against you.