QinetiQ , pronounced the same as kinetic, is a British defence company. There is a fair amount of activity in the share price, as you can see from the daily chart below, which makes it worth a look for spread betting.
The company was only formed in 2001, and it arose out of privatization of some of government agencies. The curious name arises out of the convoluted combination of “Qi” meaning energy, “net” for a networking ability, and “iq” representing intellect. There have been various problems with its operation during the short time it has been in existence. Some of this was concerned with the acquisition by the US equity company Carlyle Group of a 31% share before the company was floated on the stock market.
The flotation happened in 2006, and was dogged with questions about the high level of remuneration given to management. The British government had given assurances also that they would retain the lion’s share of QinetiQ in the face of the large amount owned by Carlyle. The initial public offering was not due to give any openings to the retail market, but only permit institutional investors. In the event, some retail investors were allowed because a few brokerage firms placed orders as if they were institutional investors, but on the instructions of retail clients.
A subsequent inquiry into the flotation in 2007 found that there were problems with the privatization which resulted in a loss of value to the UK taxpayers. However, Carlyle did divest itself of its holdings in 2007.
As an international defence and security company, QinetiQ offers consultancy, technology solutions, system engineering and hardware such as the Talon robots which were used in Iraq and Afghanistan. The chart shows some strong trends, and this looks like a company that may provide both long and short spread betting opportunities.
QinetiQ Rolling Daily: How to Spread Bet on QinetiQ Shares?
Looking at the share price of QinetiQ, you may decide that it currently presents a shorting opportunity. In that case, you might want to place a sell bet on the stock. The current quotation for a rolling daily bet is 186.53 – 187.47. These overall values are fairly low, so you may decide to stake as much as £25 per point.
Say the price goes down to 172.88 – 173.82. You could choose to close your spread trade and collect your winnings. The bet went on at 186.53, the selling price as it was a short bet. The bet closed at 173.82. That means that you won 186.53 minus 173.82 points, which works out to 12.71 points. As you staked £25 per point, that leaves you with a profit of £317.75.
Sometimes a trade will not go in the direction you want it to, no matter how carefully you have analyzed the charts. Perhaps in this case the price might have gone up to 194.72 – 195.66 before you decided to cut your losses and close the trade. With a starting price of 186.53, and the price at the close of 195.66, this time you have lost 9.13 points. Multiplying 9.13 times £25 gives a total loss of £228.25.
Many spread betters decide to use a stop loss order when they place a trade. This requires your spread betting provider to close a losing trade if it reaches a losing level that you set, and you do not have to keep an eye on the market. In this case a stop loss order might have closed the trade when the quote went up to 190.63 – 191.57. Working out your loss this time, 191.57-186.53 is 5.04 points. With a stake of £25 per point your total loss when you used a stop loss order would amount to £125.88.
QinetiQ Quarterly Futures
Quarterly futures spread bets generally cost a little more than the rolling daily bets, and this is achieved by an increase in the spread between the buying and selling prices. However, there is never any price adjustment to your account for rollovers, and you can keep the bet open until the expiration date if you wish. You still have this facility to close the bet at any time until then. The current quote for a far quarter spread bet on QinetiQ is 187.25 – 189.51. Perhaps you decide to place a long bet for a stake of £20 per point, buying at 189.51.
As an example, assume that the price goes up and you decide to close for a win when the quote is 207.73 – 209.99. Your opening price was 189.51, and your closing price will be 207.73, the selling price. With this bet you would have made 207.73 minus 189.51 points, which works out to 18.22 points. Multiplying by your stake of £20 per point, your total profit would be £364.40.
If the price moved against you, you should be ready to close your position for a loss. Say the price dropped to 179.06 – 181.32 at which point you decided to end the trade. The bet opened at 189.51 as before, and closed at 179.06. That means you lost the difference, which is 10.45 points. For your chosen size of stake, this would amount to a loss of £209.
Another way that a losing trade can close is when you place a stop loss order on your bet. Your spread betting provider will close your trade when it reaches a losing level that you set. Say in this case the trade was closed at a price of 183.16 – 185.42. This time you would have lost 189.51 minus 183.16 points, which is 6.35 points. Multiplying by your stake of £20, your total loss would be £127.