Spread Bet on Petrofac Shares
Petrofac provides services to the energy industry. It was started in 1981, working on a project in Texas, and has since expanded to cover many areas of the world. It is registered in Jersey, with headquarters in London and offices in several other countries. Most of its business is in the engineering & construction division, designing and building oil and gas infrastructure, operating and training. It specializes in lump sum contracting, which exposes it to some risks, particularly when you consider the areas of the world in which some of its operations take place, which are not particularly stable. However it has shown good growth over the last decade, as may be seen from the monthly price chart below.
The company only went public in 2005, with a market capitalization of more than US$1 billion, and as you can see the value has increased dramatically since then. It has taken part in many acquisitions and reorganizations during this time, and although work specializes in oil fields, recent acquisitions have been in the low carbon and renewable energy sectors.
As with all companies in the energy market, you can expect the share price to be volatile, and they may well be subject to government instabilities in the various countries of operation. Therefore it is important when doing any trading to be clear on the amount of risk that you are taking, and to have a secure plan to mitigate any losses. With that said, the volatility that you can see in the chart also represents profit opportunities for the spread better, and as long as you have a sound strategy in place you may find that you get good profits from spread betting on Petrofac. The company has a proven track record and should continue to grow, with periodic retracements providing an opportunity to bet counter-trend.
Spread Betting Petrofac Rolling Daily
Petrofac provides services to the oil and gas industries, and is an experienced provider in what is still a growing market. The current spread betting quote for a rolling daily bet is 1575.4 – 1578.6. If you think that the price will increase, then you might place a small wager on this stock, bearing in mind that with a share price of nearly £16 per share, even a small percentage change in price will move the numbers many points. Say you bet £4 per point at the buying price of 1578.6.
Perhaps in a few days you will see the price increase to a level that you are aiming for, and close your bet when the quote is 1703.2 – 1706.4. As it is a long bet, it closes at the lower or selling price of 1703.2. The number of points you have made is 1703.2 minus 1578.6, which is 124.6. Multiplying by your stake of £4 per point, you have made a profit of £498.40.
Prices go down as well as up, and it is not always possible to anticipate the direction in advance. Successful traders do not necessarily have a much greater number of winners than losers, but they make sure that losses are contained so that they do not cause too much damage to the account. Suppose the price went down to 1492.6 – 1495.8, at which point you closed the bet to cut your losses. With a starting price of 1578.6, and a closing price of 1492.6, you have lost 86.0 points. For your stake, that has cost you £344.
It is often a good idea to set a stoploss order in advance, to close a losing position for you even if you’re not watching the market. If you did that in this case, your bet might have been closed at 1526.2 – 1529.4. Using a stoploss, you would have lost 1578.6 minus 1526.2 points, which is 52.4 points. For your chosen stake, your total loss is £209.60.
Petrofac Futures Style Spread Bet
Whether you use a futures style bet or the rolling daily depends on your strategies. Futures style spreadbets are better if you think you may be holding the position for some weeks or months, even though you could close it the day after you took it out, if you had a reason to. The current price for a medium-term futures style bet is 1576.9 – 1588.9. Suppose you believe that the price will fall, you could place a short bet for £5 per point at 1576.9.
In due course, you may see the price go down and decide to close your bet and collect your winnings. Say the price went down to 1463.1 – 1473.5, at which point you decide that you had seen the best part of the fall in price, and close the spread trade. The starting price was 1576.9, and the spread bet was closed at 1473.5. That means you gained 103.4 points. Multiplying by your stake, you gained £517.
As a second example, you might find the price went up after you placed your short bet, and you have to close your position to minimize your losses. Say it went up to 1652.5 – 1663.9, and you decide to get out of the situation. You close the bet at 1663.9. Taking away the starting price of 1576.9, you have lost 87.0 points. At £5 per point, the bet has cost you £435.
Another way that you can arrange for a losing bet to be closed out quickly is to set a stoploss order when you place the original bet. Even if you’re not watching the prices in the market, your spread betting broker will close your losing bet for you. If you used this, perhaps your bad bet would have closed out at 1635.0 – 1646.2. 1646.2 less 1576.9 is 69.3 points. Multiplying by £5, your loss is £346.50.
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