Dunelm Group Fundamentals
Dunelm Group (DNLM) is also known as Dunelm Mill, its trading name, and is a major British homewares retailer. The daily price chart below shows some interesting price movement for spread betting, with a choking Bollinger Band in November resolving downwards.
The Group is also known as Dunelm Soft Furnishings, and originated in 1979 from a market stall in Leicester. Now the homewares group has 133 stores around the UK, many of them superstores. The initial trade was in home textiles, and the first store was opened in 1984, with the first superstore appearing in 1991. The company expanded rapidly, and in 2006 was listed on the exchange with a £340 million market tag. The company now has a market valuation of about £1.7 billion and its headquarters are still in Leicestershire.
Historically, Dunelm started manufacturing in 2001, by acquiring Bellbird which made custom blinds and curtains. There were many changes during the first decade of the 21st century, with a new Chairman and Directors continuing the meteoric expansion. The number of stores has more than doubled since 2003 with the company continuing to expand its store portfolio across the UK in its quest to achieve full national coverage.
Another major acquisition was the Dorma brand of bed linen in 2008. Currently the range of products sold by Dunelm Mill includes furniture, bedding, cushions, dining products, fabrics, rugs, lighting, kitchenware, curtains & blinds, and quilts. Its specialist ‘Simply Value for Money’ proposition appeals well with clients and the company is fast building a loyal base. On one end of the scale the company’s products are priced to compete with supermarkets and discount stores without compromising on the quality. At the premium end, high quality at competitive prices help Dunelm to fight off competition from the big department stores and high-end independent retailers. Web-based sales are also growing sharply, albeit from a small base and presently represent about 4% of total sales; their web store has recently been revamped, and now it features more than 13,000 different products.
Despite the dip in price a month or two ago, the company is in a strong position and making all the right moves for good expansion in the future. The upturn in the MACD on the right-hand side of the chart above looks to be genuine, and an indication of a continued uptrend. Despite the various ups and downs shown on the chart, the volatility is not huge and the real bodies of the candlesticks are relatively small, indicating a settled price rather than a variable one. If you use candlesticks signals to assist in your trading, it is important to note that you are looking for patterns out of the ordinary, rather than simply for small or large real bodies.
Dunelm Group Rolling Daily: How to Spread Bet on Dunelm Group Shares?
Dunelm has stable price movements, which makes it kind to the novice spread better who is learning to trade. Nonetheless, you need to perform technical analysis to determine that the most likely direction of price movement. The current quote for a daily rolling bet is 656.4 – 660.6, and if you think it is going to go up you might choose to stake £15 per point at the buying price of 660.6.
Suppose it goes up to 689.27 – 693.47, and you decide that is a good profit and close your bet for a win. The bet would close at 689.27, so taking away 660.6 you find that you have won 28.67 points. Your stake was £15 per point, so multiplying this out your total profit is £430.05. Against this, you may have been charged a small maintenance charge each evening when the bet was rolled over, but usually this is not a significant amount.
You should also consider that many trades lose, and be prepared to work out how much your losses are. If the price went down to 636.68 – 640.88, then your closing price for the bet would be 636.68. 660.6-636.68 is 23.92 points, and multiplying this by your wager of £15 your loss would work out to £358.83.
Unless spread betting is your full-time business, you are probably unable to keep a watch on the prices all day long, so you should consider placing a stop loss order on each bet you make. With a stoploss order on this bet, you might find that your spread betting provider would have closed the trade for you at 643.25 – 647.45. The opening price was 660.6. The bet was closed for you at 643.25. That means that you lost 660.6-643.25 points, which is 17.35 points. Multiplying by your stake, this amounts to £260.25.
Dunelm Group Futures Style Bet
With a futures style bet, you have an extended expiration date and no roll over charges applied to your account. However, the spread is usually larger, so you need to do your calculations to see which works out better for you. The current quote for a futures bet on Dunelm for the far quarter is 658.9 – 667.8. Let us say you choose a short position with a wager of £12 per point.
Considering first a winning bet, perhaps the price will go down to 609.6 – 618.5 and you will close the bet. This is how you work out your profit: –
- Your bet was placed at a price of 658.9
- Your bet closed at 618.5
- Therefore you made 658.9 minus 618.5 points
- This works out to 40.4 points
- Your stake was £12 per point
- Your profit was 40.4 times £12
- Which works out to £484.80
For a losing example, assume the price went down to 685.2 – 694.1. The calculation is similar to above: –
- Your bet was placed at a price of 658.9
- Your bet closed at 694.1
- Therefore you lost 694.1-658.9 points
- This works out to 35.2 points
- Your stake was £12 per point
- Your loss was 35.2 times £12
- Which works out to £422.40
Many if not most spread traders consider a stop loss order part of their trading. It is difficult to keep an eye on prices all day long, and the stop loss order means that your spread betting provider will close a losing trade before it becomes too large. On this trade, a stop loss might have closed the bet when the price went up to 675.34 – 684.24.
- Your bet was placed at a price of 658.9
- Your bet closed at 684.24
- Therefore you lost 684.24 -658.9 points
- This works out to 25.34 points
- Your stake was £12 per point
- Your loss was 25.34 times £12
- Which works out to £304.08