Mondi Fundamentals
Mondi is an international company with business in over 30 countries. When spread betting on Mondi, you should bear in mind that it is listed both on the London Stock Exchange and on the Johannesburg Stock Exchange, as it was first started in South Africa in 1967, and that currency fluctuations may play a part in its valuation.
Here is a recent weekly price chart which shows a volatile share price, and therefore one which is eminently tradable, as long as you have the experience and trading strategy to cope with any losses.
Monday is a paper and packaging company, and takes on the whole process of that business, from growing the trees and recycling through conversion to the final product. As it is in control of each stage of the process for manufacture, it is less reliant on other companies and in charge of its own destiny.
From its South African roots it expanded into Europe in the 1990s, and continued to grow and consolidate its position by acquisition. In fact it bought businesses in many different countries, including the UK, many European countries and Mexico. For instance, it took over businesses which were considered market leaders in Austria, Poland, and Russia.
It became dual listed on the Stock Exchanges in 2007 when it de-merged from its founders and initial owners, Anglo-American PLC. The business was reorganized in 2008 into two divisions, South Africa, and Europe & International. As a measure of the size of the business, the Mondi Group which serves under Europe & international has 80 production facilities in 27 countries, and the South African division has 750,000 acres of plantations under management.
You can see from the price chart that the shares exhibit good volatility, and are therefore likely to produce good returns if you are careful to implement sound trading strategies.
Mondi Rolling Daily: How to Spread Bet on Mondi shares?
As Mondi is in the paper business, its profitability can be affected by the demand for paper and corrugated cardboard products. It is a major world producer of these items, and has fully recovered from the global economic downturn of 2008. The current price for a daily rolling bet is 657.4 – 661.7.
For the sake of example, assume that you have decided from analysis that it is likely the price will go up, and you place a long bet on Mondi staking £2.50 per point. As it is a long bet, the starting price will be the higher (buying) price of 661.7. If the price goes up as you expect, you might find that you are able to close your trade and collect your winnings when the quote is 723.6 – 727.9. The closing price would be the selling or lower price of 723.6. This means that you have gained 723.6 minus 661.7 points, which is 61.9 points. As you staked £2.50 per point, your winning bet is worth £154.75.
You must also be prepared for the price to go in the other direction, and close your bet for a loss before you risk losing too much. Perhaps the price could drop to 608.7 – 613.0, and you decide to cut your losses. The bet was opened at 661.7, as before, and this time it closed at 608.7. That means you have lost 53.0 points, and that loss would cost you £132.50.
You should also consider using a stop loss order to help you minimize any potential loss. With a stoploss order, you might find that the bet was closed for you when the price went down to 619.7 – 623.0. With an opening price of 661.7 and a closing price of 619.7, this time you would have lost 42.0 points at a cost of £105.
Mondi Futures Based Bet
if you’re thinking of holding your bet open for a few weeks or months, then you should consider a futures style bet. A rolling daily bet can attract a charge each evening when the bet is rolled over, but a futures bet is good until the expiration date with no further cost. The current price for the far quarter futures bet on Mondi, expiring in eight months time, is 658.3 – 666.8.
Once again, you may be bullish on this stock, this time staking £6.50 per point at the buying price of 666.8. Let’s assume that the price goes up to 722.6 – 729.4, and you decide to close the bet and collect your winnings. Your long bet closes on the selling price of 722.6. 722.6 minus 666.8 is 55.8 points. Multiplying it by £6.50, you find that this win is worth £362.70.
You must always be prepared for a loss, so suppose that the price falls to 621.1 – 628.9, and you can see that your reasons for opening the bet have failed, so you close the trade and accept your loss. The opening price was 666.8, as before, and this time the closing price is 621.1. The difference between these is 45.7 points. With a stake of £6.50 per point, that amounts to a loss of £297.05.
Many traders, particularly with spread bets that are expected to take some time, decide that they should use a stop loss order to minimize their potential loss. With a stoploss order, there is no need to watch the market as the spread betting provider will close the bet automatically. In this case, a stoploss order might have closed the bet at a price of 632.0 – 639.3. With a starting price of 666.8 and a closing price of 632.0, your loss in this case with a stoploss order is 34.8 points, and that would amount to a loss of £226.20 for your chosen size of wager.