Great Portland Estates is a property development and investment company which was founded in 1959. It was originally formed to invest in properties developed by the Dukes of Portland, and was immediately listed on the London Stock Exchange. As you can see from the daily chart below, it has a fair share of ups and downs, making it an interesting prospect for spread betting.
Because this is a property based company, its value plummeted from around 600 to 200 over the global economic crisis. As you can see from the values above, it still has not regained its earlier price. The majority of its investment properties are in London, and are commercial with most of them being office space. The total value of its properties is about £1 billion.
Great Portland Estates took advantage of the change in law in 2007, which allows Real Estate Investment Trusts (REITs) to be formed in the UK. These companies are set up to save corporation tax, and one of the conditions to qualify as a REIT is that at least 90% of the income must be distributed to the investors, making them a very popular vehicle for investors, always provided real estate is seen as a stable shelter for their funds. The original idea behind a REIT was to create an investment structure similar to that used by mutual funds investing in stocks.
Apart from catastrophic times in real estate, the property market is viewed as fairly stable and capable of steady growth, and you can see that in the chart above. The fluctuations up and down reflect investor concerns for particular property values and rentals. The Bollinger Bands keep a fairly narrow configuration, which shows a lack of overall volatility, although with the number of up-and-down trends that can be seen there are still many trading opportunities.
Great Portland Estates Rolling Daily: How to Spread Bet on Great Portland Estates Shares?
The current quote for a daily rolling bet on Great Portland Estates is 489.57 – 492.03. If you think that the share price will go up, you might want to place a long bet for £20 per point, and this would be placed at the buying price of 492.03. Say the price goes up to 510.13 – 512.59, and you decide that you want to collect your winnings. You can work out how much you have won quite easily, simply by calculating the difference in points and multiplying by your stake.
- Your bet was placed at 492.03
- You closed your bet at 510.13
- Therefore you gained 510.13 minus 492.03 points
- That works out to 18.10 points
- Your stake was £20 per point
- Your profit is 18.10 times £20
- Total profit £362
If you are not so lucky, and the price goes down, then you may need to close your bet for a loss to avoid any further deterioration. Say the price went down to 475.18 – 477.64. Calculating your losses is also a simple process.
- Your bet was placed at 492.03
- You closed your bet at 475.18
- Therefore you lost 492.03 – 475.18 points
- That works out to 16.85 points
- Your stake was £20 per point
- Your loss is 16.85 times £20
- Your total loss is £337
When you do not have time to keep checking the prices, it can make sense to use a stop loss order to terminate a losing position. In this case a stoploss order might have triggered to get you out of your losing trade when the price was 479.29 – 481.75.
- Your bet was placed at 492.03
- Your bet was closed at 479.29
- Therefore you lost 492.03 – 479.29 points
- That works out to 12.74 points
- Your stake was £20 per point
- Your loss is 12.74 times £20
- Your total loss is £254.18 using a stop loss
Great Portland Estates Futures Style Bet
Great Portland Estates has exhibited a fairly steady growth pattern in recent months, so you may decide based on your own analysis that it is worth a long futures style bet. The current quote for a quarterly futures bet is 491.48 – 497.41 for the far quarter. Say you decide to stake £12 per point at the buying price of 497.41.
Consider first that the price goes up giving you a winning position. Perhaps the price will go up to 522.32 – 528.25 and you will decide to collect your winnings. The starting price was 497.41. You closed your bet when the selling price was 522.32. That means you gained 522.32-497.41 points. This works out to 24.91 points. Multiplying by £12, your total gain is £298.92.
As the financial markets are fickle, no one can know for sure which way the price will go. Consider now that the price went down after you placed your bet, and you decide to close the trade and cut your losses. Perhaps the price went to 468.86 – 474.79 before you managed to close the spread bet. The starting price was the same, at 497.41. This time you closed your bet at a price of 468.86. You lost 497.41 minus 468.86, which is 28.55 points. With a stake of £12 per point, that works out to a loss of £342.55.
No one can keep spread betting for long if they lose more than they gain. You might consider taking out a stop loss order so that a losing trade is closed automatically in a timely manner. For instance, on this spread bet you might find that a stop loss order took you out of the trade when the price was 479.14 – 485.07. Your spread betting provider would have closed your trade at 479.14, so taking this away from a starting price of 497.41 you would have lost 18.27 points. Multiplying this by £12 per point, you find that your total loss would be £219.19.