Green King [GNK], as many will know, is a British brewery although today the company has grown to become a brewer-to-pubs restaurant operator. Despite the fact that it only holds 2% of the UK beer market, it has attracted criticism from beer protesters such as the consumer group CAMRA, which claims Greene King is exhibiting monopolistic tendencies. You can see from the daily price chart below that there has been a reasonable amount of activity, making this an interesting prospect for spread betting, and particularly appealing for further field research.
The brewery was originally established in 1799 in Bury St. Edmunds. It has grown to be one of the largest breweries, mainly by takeovers of other small breweries. For instance, it has bought Morland, Ruddles, Morrells, and Ridley’s. Of these, the Morrells brand is now not available and the others are produced at Bury St. Edmunds.
The objections to Greene King’s expansion in this manner extend not only to the lack of commitment to produce the different brands after takeover, but also to the fact that production has been moved to one location, which some see as compromising the variation in beer.
Operating in the Travel & Leisure sector the FTSE 250 company also manages pubs and hotels, owning and operating nearly 800 of them, and with an additional 1400 pubs that are leasehold or have tenants. Despite the low percentage of the beer market, it does appear that Greene King is having an impact on British beer.
Looking at the price chart above, there is significant and interesting volatility, but some lack of organization to the price movements. It may be that the shares will succumb to better analysis at a different time scale, such as a two hour or four hour chart. As it is, there are many candlestick patterns that can be seen. It is important to note that candlestick patterns need to be accompanied by appropriate other indications before they are acted upon.
Greene King Rolling Daily: How to Spread Bet on Greene King Shares?
Looking at the price chart, it may be that you think the share price of Greene King will be going down in the near future. If this is so, you might want to place a short or sell bet on the stock. The current quote for a rolling daily bet is 636.4 – 639.6, so you could decide to stake £20 per point on the selling price of 636.4.
If the price goes down to 618.1 – 621.3, then you have a winning position. When you spread bet, you want to make sure that you take the maximum gains that you can rather than closing for a win as soon as possible. Nevertheless, perhaps you feel the price has dropped as far as it will and close the trade to collect your profits. You opened your bet at 636.4 and closed it at 621.3, giving you a gain of 15.1 points. Multiplying this by your stake of £20, you would have won £302.
The price might have gone the other way, going up to 647.38 – 650.58, and you could choose to close your bet for a loss rather than risk the price climbing even higher. In this case, your bet opened at 636.4 as before, but it closed at 650.58, the buying price. That means you lost 14.18 points which with a stake of £20 per point amounts to £283.60.
If you do not have time to watch the market all day long, and want to avoid an unexpected large loss, you may choose to place a stop loss order on your bet when you take it out. With a stop loss order, your spread betting provider might have closed the bet for you when the quote was 641.89 – 645.09. That would be a closing price of 645.09, so taking away the opening price of 636.4 you would have lost 8.69 points. For your chosen size of stake, that amounts to £173.80.
Greene King Futures Bet
In the medium-term, that is in the next few months, you may think that the share price of Greene King will be going up, and therefore decide to place a long futures style bet on the stock. The current quote for a far quarter futures bet is 638.9 – 646.6. Say you staked £14 per point.
For the sake of example, assume the price goes up to 666.35 – 674.05. You close the bet and work out how much you have made. The bet opened at 646.6, and it closed at 666.35. That means that you have made 19.75 points. Multiplying this by your stake of £14 per point, you would have won £276.50.
Say that on the other hand the price went down, and you were faced with a losing position. Part of trading discipline is to know when to close a losing bet and accept your loss, rather than stay in the bet and risk losing more. Perhaps you closed your losing bet when the price went down to 627.92 – 635.62. With an opening price of 646.6 and a closing price of 627.92, in this case you have lost 18.68 points. Multiplying this by your £14 stake means that you lost a total of £261.52.
Should you not have time to watch the market to check for the price running against you, you may choose to take out a stop loss order when you place your bet. With a stop loss order on this bet, your spread betting provider might have closed the trade for you when the price fell to 633.41 – 641.11. Although you still have an opening price of 646.6, the closing price for your bet is now 633.41, which means you only lost 13.19 points. If you figure this out for your wager of £14 per point, your total loss would work out to £184.66.