UBM plc has been in business under that name since May 2011, but it can trace some of its origins back almost two centuries. The company is in media, and has an active price chart, as you can see below, which is an advantage when spread betting.
UBM is headquartered in London, and it deals in media and communications, including marketing and data. It principally works in the healthcare, fashion, technology, and transport sectors. It was formed as United Newspapers in 1918, but it publishes titles such as the Journal of Commerce which was first started 1827. For many years it was concerned only with regional newspapers, but merged with MAI, a television company, in 1996 to form United News and Media.
There followed some years of mergers and acquisitions, which were all carefully controlled by regulations which were designed to prevent any franchises controlling more than a certain percentage of the broadcasting market place. In 2005 UBM rationalized its operation, concentrating on two main businesses, PR Newswire the news distribution business, and CMP an online publishing, print, and international events business. 2008 saw further reorganization with a Jersey incorporated holding company, United Business Media. As mentioned above, the name was shortened to UBM in 2011.
The print and media business is a changing environment, and this is reflected in the performance of the share prices. Controlling interests are always changing, and UBM is currently a major shareholder in ITN and other better-known names. For spread betting, we are interested in changing prices and trading strategies. The Bollinger Bands clearly marked some sharp moves, and the MACD provided further evidence of intermediate trends. However given the size of the candlesticks and the speed with which the prices change, you need to be sure that you have a good strategy which will minimize your risk of loss when you spread bet on this stock.
UBM Rolling Daily Spread Bet
The current price for a rolling daily bet on UBM (UBM.L) is 711.2 – 714.8. Taking a bearish view, you may choose to short the stock with a sell bet at £5.50 per point. If this turns out to be correct, the price may fall to 652.6 – 656.2 and you can close your bet and collect your profit. Your short bet was placed at the selling price of 711.2. It closed at the buying price of 656.2. That means you gained 711.2 minus 656.2 points, which is 55.0 points. Multiplying by your stake of £5.50 per point, your profit works out to £302.50.
However, if the bet did not work out and the price increased after you placed it, you might find that you would have to close the bet and cut your losses when the quote was 759.1 – 762.7. With the same starting price of 711.2, your closing price this time would be 762.7. 762.7 less 711.2 is 51.5 points, and for the same size of stake that would be a loss of £283.25.
Unless you are trading all day long, you may find difficulty in watching the markets in case the price turns against you. In this case, the stop loss order is very useful, as it requires your spread betting provider to close a losing bet for you when it reaches a price level that you set. You do not have to be watching the market or even online when the price is hit. With a stop loss order, you might find that you save some money, for instance it might have closed this losing trade at a price of 747.7 – 751.3. Your closing price this time would be 751.3, and taking away the opening price of 711.2 you would have lost 40.1 points. Multiplying by £5.50, this works out to a loss of £220.55.
UBM Futures Based Bet
With a far quarter spread betting quote of 712.8 – 721.4, you might choose to take a bearish view on this stock and sell at a price of £4.50 per point. This would be placed at the shorting or selling price of 712.8.
Assume for the sake of example that the price fell to 653.1 – 660.9, and you decided to take your profits. The bet was opened at 712.8, and you closed it at 660.9, the buying price. Taking 660.9 away from 712.8, you find that this bet is worth 51.9 points. 51.9 times £4.50 amounts to a win of £233.55.
Even the best traders do not win all the time, so you must be prepared to accept a number of losses. Suppose that the price rose to 745.3 – 753.9, and you closed the trade and accepted the loss. The starting price was 712.8. The bet closed at 753.9. 753.9 minus 712.8 is 41.1 points. For your chosen size of stake, that amounts to a loss of £184.95.
Many spread betters make use of the stop loss order. The stop loss order is usually placed when you take out the initial bet, and you simply have to tell your spread betting provider the price at which you would like your bet if it is losing to be closed. Note that unless you pay extra, by having an increased spread, the price that you get is not guaranteed, but your bet will be closed at market price as soon as the price is reached. A stop loss order in this case might have closed your bet at a level of 737.6 – 745.2. The bet closes at 745.2, so taking away the starting price of 712.8 you would have lost 32.4 points. For a stake of £4.50, that means that your total loss is £145.80.