Investec Fundamentals
Investec plc is an international asset management and financial banking group. It is listed on several markets, as detailed below, so you need to be sure which one you are spread betting on. The recent weekly price chart for the UK shares looks like this: –
You can immediately see that there is significant volatility, with no overriding trend. Investec started in South Africa, where it was formed as a leasing and financing company in 1974. It now covers the four principal markets of South Africa, the UK, Australia, and Ireland. It has interests in several other countries, such as Switzerland and the United States.
Investec’s expansion has happened mainly through acquisition. It was first listed on the South African Stock Exchange, the JSE, in 1986. In 1990 it acquired a property management company and a trade finance company, expanding its operation, and in 1992 entered the UK through acquiring a London-based bank, Allied Trust Bank. It strengthened its London position by buying Guinness Mahon, Henderson Crosthwaite, and Hambros PLC in 1998.
It wasn’t until 2002 that Investec was listed on the London Stock Exchange. This came as a dual listing, with the company being listed both in South Africa and London, and it set up a special dual listed company structure. This means that the company has separate legal entities in the two countries, though they are committed to each other with contractual agreements. There are common voting interests for shareholders, but creditors are committed to either one or the other, with no guarantees across country borders.
From a spread betting and trading point of view, the chart exhibits clear and strong trends which can be traded for a profit. It is evident that the price is volatile, and that trends can quickly reverse, which means that you must have and stick with a trading strategy that minimizes your downside risk.
Investec Rolling Daily: How to Spread Bet on Investec Shares?
The current price for a daily rolling spread bet on Investec is 367.38 – 369.22. This is a volatile share, and if you see an opportunity for profit it is likely that it will move quickly. You may believe that the price will fall, and want to place a sell bet, taking a short position for £7 per point.
As an example, assume that the price falls and you decide to take your profits when it drops to 315.27 – 317.10. You can work out how much you won like this: –
- Your bet opened at 367.38
- You closed your bet when the price reached 317.10
- Therefore you have gained 367.38 minus 317.10
- This is 50.28 points
- Your stake was £7 per point
- So you have won 50.28 times £7
- Your total winnings are £351.96.
Now consider the possibility that your bet did not win, and that you must close it at a loss in order to prevent any further loss. You close your bet when the price quoted has risen to 405.96 – 407.80.
- Your bet opened at 367.38
- You closed your bet when the price reached 407.80
- Therefore you have lost 407.80 minus 367.38
- That is 40.42 points
- Your stake was £7 per point
- So you have lost 40.42 times £7
- The total you lost is £282.94.
It can be a good idea to set a stoploss order when you open your bet. This helps as it closes a losing bet for you, even if you do not have time to watch the market. Suppose a stop loss order would have closed the spread trade for you when the quote was 392.52 – 394.27.
- Your bet opened at 367.38
- The stoploss order closed your bet when the price reached 394.27
- Therefore you have lost 394.27 minus 367.38
- That is 26.89 points
- Your stake was £7 per point
- So you have lost 26.89 times £7
- The total you lost is £188.23 using the stop loss order.
Investec Futures Spread Bet
Investec specializes in banking and asset management and has expanded into several countries from its early start in South Africa. You may choose to take a bullish stance on the future of Investec over the next few weeks or months, and want to place a long bet on the far quarter spread bet. The current quotation is 368.45 – 372.90, and you wager £5 per point. The long bet goes on at the buying price of 372.90.
If in the future the price goes up to 415.76 – 419.68, and you decide to close the trade and collect your winnings, then you can work out how much they are fairly easily. The opening price was 372.90, and the spread bet closed at 415 .76. 415.76 minus 372.90 is 42.86 points. As you staked £5 per point, you would have won £214.30.
If the future is not so kind to you, and the price falls, then you should have a price level worked out at which you need to close the trade and cut your losses. Say the price goes down to 338.63 – 342.67. Closing the bet at this time, you would have lost 372.90 less 338.63, which is 34.27 points. Your bet of £5 per point would cost you £171.35.
It is useful to know about the stop loss order, which many traders use on every bet they place. This requires your spread betting provider to close your losing bet once it reaches a certain price, whether or not you are watching the markets. Perhaps with a stoploss order your bet would have closed earlier, at 343.96 – 347.50. This time your points loss is 372.90-343.96, or 28.94 points. 28.94 times £5 works out to £144.70, reducing your loss. Note that unless you pay extra for a guaranteed stop loss, the actual price that the stoploss order closes at is not assured, but it should normally be close to the price you set.