Spread Bet on Intertek Group | Trade Intertek
Intertek Group plc (ITRK) is an international product certifying and testing company, so even though it may not be a familiar name, it plays an important role in testing products to make sure they meet regulatory standards. It is the largest tester of consumer goods in the world, and has more than 1000 laboratories in 100 countries. The £5.5 billion caps company is head-quartered in London.
The roots of the çompany are based at the end of the 19th century, with a marine surveying business, a testing laboratory in Canada, and a lamp testing centre in the US. These businesses were all acquired in the 1980s and 90s by a company called Inchcape Testing Services, which in turn was acquired by Charterhouse Development Capital, at which time it was renamed Intertek. Charterhouse got rid of it in 2002 when it was listed on the London Stock Exchange.
The food to commodities testing expert company is broken up into five divisions. The first one is called commodities, and this provides cargo inspection and analysis to the oil and mining industries. The second is industry and assurance, a general title which covers services to businesses to meet global quality standards. The third group is consumer goods, covering all sorts of retail items such as toys and food. The fourth is commercial and electrical, which provides quality testing and certification services to manufacturers and retailers. Finally the last division is chemicals and pharmaceuticals, which serves a range of industries including not only chemical and pharmaceutical, but also automotive and aerospace.
As you can see from the monthly chart above, Intertek has been growing aggressively, albeit with some noticeable retracements. Its daily range seems to be about 40 or 50 points, with a maximum of about 100 points in any particular trading session. All in all, an active share price which should respond well to technical analysis and give many opportunities for profit.
How to Spread Bet on Intertek Group: Rolling Daily
Intertek has been growing aggressively in recent years with consistent high growth and high returns over the years with profit margins around the 20% level. Noticeably, pre-tax profits have increased from £24 million in 2000 to £308 million in 2012 and the company has taken steps to cut its debts. It is the largest tester and certifier of goods in the world, providing a service to many manufacturers. The current price for a daily rolling bet is 2469.5 – 2474.5. If you think that the price is going to increase, you would place a long bet on this stock, betting perhaps £2 per point.
If your spread bet is successful, the price might go up to 2586.2 – 2591.2. If you closed your bet at this level you could work out how much you had won in this way. The long bet was opened at the buying price of 2474.5, and you closed it when the selling price was 2586.2. That means that you gained 2586.2 less 2474.5 points, which is 111.7 points. You staked £2 per point, which means you have won £223.40.
Of course, your bet might not be successful and the price might fall until it reached a point where you decided to close your spread trade and cut your losses. Say it fell to 2382.6 – 2387.6, and you closed your bet. Your bet was placed at 2474.5, and it closed at 2382.6. The difference between these is 91.9 points. At £2 per point, you have lost £183.80.
It is difficult to be watching market prices all the time, so what many spread traders do is place a stop loss order when they take out the initial bet. These orders tell your spread betting provider to close your trade when it reaches a certain level of loss. It does not guarantee the price that you will close the trade at, but ensures that you are taken out of the market before you lose any more. Perhaps in this case your bet would have closed at 2405.6 – 2410.6. You would have lost 2474.5 less 2405.6 points, which is 68.9 points, and that would have cost you £137.80.
Intertek Group Futures Style Spread Bet
The current price for the far quarter based future spread bet is 2483.7 – 2495.7. As a reminder, the futures style bet has no charge all the while you hold it, unlike the rolling bet, and can be closed at any time. You do not have to wait for the expiration date. But in return for not having any charges, the spread is usually larger than for the daily bet, in this case 12 points compared to five points, so it usually works out best only if you plan to hold the bet for a month or longer.
If you think that the price is going up, you could place a long or buy bet for, say, £2.50 per point at 2495.7. Assuming you are correct, you might find that you can close this bet for a win when the quote goes up to 2611.6 – 2622.5. The bet would close at the selling price of 2611.6. Working out the difference in points, 2611.6 less 2495.7 is 115.9. That amounts to £289.75 profit for your chosen bet size.
Of course, and perhaps more frequently than you would wish, the markets can run against you. Say the price fell after you placed the bet, you could choose to cut your losses and close the spread trade when the price went down to 2403.2 – 2414.6. Once again, the spread bet closes at the selling price, in this case 2403.2. The difference between the opening and closing prices is 92.5 points, which for your stake works out to £231.25 lost.
You may instead have placed a stop loss order on this bet, which will take you out of a losing trade even if you’re not watching the market. Using this perhaps you would exit the losing spread bet sooner, at a price of 2436.0 – 2447.8. Your bet opened at 2495.7, and closed at 2436.0. That means you have lost 59.7 points, which amounts to £149.25.
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