Looked at from a longer time scale, Murray International Trust appears to be on a steady growth pattern. But when you look at the daily price chart below, you can see that there is some substantial volatility, which seasoned traders look for when spread betting.
Murray International Trust is an investment trust which comes under the jurisdiction of Aberdeen Asset Management, as the fund manager is Bruce Stout of Aberdeen Asset Management. The company has been around since 1991, and is dedicated to investments in worldwide equities. As with almost all funds, its stated purpose is to achieve a return which is greater than its benchmark. Many funds do not succeed in bettering an unmanaged market index, but this is due in part because funds have an annual service charge to pay the fund manager.
In the case of Murray International Trust, the fee is quoted as 1.1% for an ongoing charge plus an annual management fee of 0.5%. You can see that in times of low returns, such as at present, these can be significant.
From a trading perspective, the chart above is extremely simple and provides clear-cut signals for the spread better. Each up and down trend is signalled by the MACD, and lasts fairly consistently for some weeks, making it relatively easy to trade with a trend and show a profit. Of course, there is no guarantee that the fund will continue to perform in this manner, and therefore you should not rely on this evidence, while perhaps still take it into account when deciding on your trading strategy.
As an example of the “caveat emptor” situation, look to the left of the chart where you can see two distinct gaps. These could catch out a trader who was not alert, and negate or reverse any gains.
Murray International Trust Rolling Daily: How to Spread Bet on Murray International Trust Shares?
The current price for a rolling daily bet on Murray International Trust is 1038.4 – 1043.6. If you think that the share price will be going down, you could place a sell bet at 1038.4, wagering perhaps £10 per point. For the sake of this example, assume that the sell bet succeeds, and the quote goes down to 995.9 – 1001.1, at which time you decide to close your trade and collect your winnings.
Your short bet was placed at 1038.4. You closed it at 1001.1. That means you gained 1038.4 minus 1001.1 points, which is 37.3 points. Your stake was £10 per point, which makes the calculation easy – you would have won £373 on this bet.
It is important to remember that you do not have to win every bet, and that one of the secrets of making a profit out of financial trading is to accept your losses quickly, keeping them to a minimum, whilst allowing your wins to ride until there is little more to be had. If this bet turned out to be a loser, with the price going up to 1063.9 – 1069.1 before you closed it, you would have lost 1069.1 less 1038.4 points, which is 30.7 points. For your £10 stake, this would cost you £307.
One of the ways in which you can close a losing bet quickly is to place a stop loss order when you take out the bet. You tell your spread betting provider the price at which you want him to close a losing trade, and then he is responsible to end your bet, whether or not you know what the price is currently doing. With a stop loss order, this trade might have closed at 1051.15 – 1056.35, which means the closing price would be 1056.35. Taking 1038.4 away from that, you would have lost 17.95 points, and that would amount to a loss of £179.50.
Murray International Trust Futures Bet
The far quarter futures bet on this Trust is priced at 1042.6 selling, 1054.6 buying. You might be bullish, thinking that the price will be going up over the next few months, and decide to wager £6 per point on a long bet at 1054.6. With a futures style bet, you can close the bet at any time and do not have to wait until expiration. This means if you have achieved as much profit as you think you can, or if you are in a losing position and do not want to lose any more, then you can end the trade there and then.
Suppose the price goes up, until it reaches a quote of 1106.35 – 1118.35, where you decide to collect your winnings. The starting price was 1054.6, and you closed the bet at 1106.35. That means you gained 51.75 points. With a stake of £6 per point, that works out to a profit of £310.50.
Alternatively, the price might have gone down, and whether or not you would have been proved right in the long term you decide that you must close the trade when the price reaches 1017.1 – 1029.1. It is important to limit your losses, and that means closing a losing position rather than simply hoping it will turn around, and possibly being disappointed. With an opening price of 1054.6 and the closing price of 1017.1, your loss is 37.5 points which amounts to £225 with a wager of £6 per point.
Many spread betters use a stop loss order to help them exit a losing trade, and with a stop loss order on this bet you might find that it was ended at 1029.85 – 1041.85. Your starting price was 1054.6, as before, and the bet ended at 1029.85, which is a loss of 24.75 points. Multiplying by £6, your total loss would be £148.50.