RIT Capital Partners is a financial company, an investment trust started by the Rothschild family. It has kept a fairly even keel in recent times, lessening the chance of big gains when spread betting, but providing a more stable environment for investors. The daily chart below shows a gradual decline in the last few months.
The name RIT came from the initial letters of the earlier Rothschild Investment Trust, although RIT Capital Partners as such only came about in 1988 as a publicly traded investment trust. The Rothschild name was deleted in 1980 because of a rift in the family over a discrepancy in investing styles. RIT Capital Partners is now one of the largest investment trusts in the UK with nearly £2 billion in assets, and it is headquartered in London.
The portfolio of RIT Capital Partners is widely diversified internationally, and is focused on long-term capital growth. The Rothschild family still retains about 20% of the value. Because of its purpose, the tendency is to invest in stocks and shares that are not volatile, but that can be expected to grow faster than the market index. This means that volatility is not sought, and from a spread betting perspective this policy is kinder to the novice who could be caught out by volatility. However, you can see that there are several longer candlesticks on the chart, so some large price movements are still possible.
The price chart exhibits typical performance with the Bollinger Bands, narrowing each time before one of the larger moves, and in this case the moves have been downward. Despite this, the share price has generally recovered rather than breaking out downwards, and therefore the overall effect has been for the price to trade in a gradually decreasing range, rather than taking a plunge.
RIT Capital Partners Rolling Daily: How to Spread Bet on RIT Capital Partners Shares?
If you see signs that RIT Capital Partners is in a downtrend, you may be tempted to place a short bet in anticipation of the move. The current quoted price for a daily rolling bet is 1145.1 – 1152.9. Say you staked £2.50 per point on the sell bet.
If it works out for you, you might find that the price goes down to 972.3 – 980.1, and decide to close your bet and collect your winnings. It is easy to work out how much you have profited. The starting price of your bet was 1145.1. Your bet closed at 980.1. That means the difference is 1145.1 minus 980.1, or 165.0 points. Your stake was £2.50 per point, which means you have gained £412.50.
But you will have your share of losses when you are trading on the markets. You must be prepared to close your bet once it becomes clear that it is not working out. Perhaps you would close your bet if the price went up to 1282.7 – 1290.5. Figuring out your loss, your starting price was 1145.1, as before, and this time your bet closed at 1290.5. The difference between these is 145.4 points, so your loss at £2.50 per point is £363.50.
Many spread betters use the stop loss order to take them out of a losing trade, without them having to keep an eye on the market. The stop loss order requires your spread betting provider to close your bet when it reaches a price you set. In this case a stop loss order might have closed your trade earlier, at 1255.7 – 1263.5. Now when you work out your losses, the closing price is 1263.5. Taking away the opening price of 1145.1, you find you have lost 118.4 points. For your chosen stake your loss adds up to £296.
RIT Capital Partners Futures Based Bet
RIT Capital Partners is an investment trust with an eye to the future, so you may wish to take out a futures style bet on its stock price. If you believe that the value of the stock is going to increase in the next few months, you might be tempted into a long bet on the far quarter, which is currently priced at 1148.6 – 1162.6. Say you staked £3 per point.
For the sake of example, say the price goes up as you hope until it reaches 1326.2 – 1340.0, and you decide to close the bet and collect your winnings. Working out your profits, your bet was placed at the buying price of 1162.6, and it closed at the selling price of 1326.2. 1326.2 minus 1162.6 is 163.6 points. As you chose to wager £3 per point, you would have won £490.80.
But by way of a losing example, assume the price went down after you had placed your long bet and you finally decided to close the bet when the price was 1006.5 – 1019.9. The calculation of your loss is just as simple as before, though more painful. The starting price was 1162.6, and this time the bet closed at 1006.5. 1162.6 less 1006.5 is 156.1 points, so multiplying by £3 your total loss works out to £468.30.
Accepting that it is in the nature of the markets that many trades will lose, it can be worth placing a stop loss order just in case, as this saves you having to keep checking the prices. With a stop loss order on this bet, you might find that your spread betting provider closed the trade for you when the price went down to 1049.5 – 1063.1. With a closing price of 1049.5, down from the opening price of 1162.6, you are now looking at a point difference of 113.1. This would amount to a loss of £339.30.