Spread Bet on SABMiller Shares | Trade SABMiller
SABMiller is a major worldwide brewer, founded in South Africa and is now head-quartered in London. In fact, SAB stands for South African Breweries, which company was founded in 1895. It operated mainly in South Africa, dominating the market, until 1990 when it started to diversify into Europe. The US Miller Brewing Company was bought in 2002, which is when the name was changed to SAB Miller. This followed listing on the London Stock Exchange in 1999, which it did to raise funds for further acquisitions. The next acquisition was Bavaria SA, South America’s second-largest brewer. Recently SAB Miller took over Foster’s, the Australian beer, although the takeover excluded Foster’s in the UK and Europe, where it is owned by Heineken.
You can see from this monthly price chart that business has been growing, and did not dip much during the global economic crisis, perhaps because of the product.
SAB operates as a responsible brewer. In South Africa is employs nearly 10,000 people, with 75% from disadvantaged groups, and 58% black workers. It promotes responsible alcohol behaviour, and helps with education and parental involvement. It even produced a black economic empowerment transaction in the 2009, and it promotes community partnerships and initiatives to build a stronger South Africa.
The primary listing of SAB Miller is on the London Stock Exchange, and it has a market capitalization of over £30 billion. There is also a secondary listing on the Johannesburg Stock Exchange. As a brewing company, it is second only in size in the world to Anheuser-Busch, and is also a major bottler of Coca-Cola.
They always say that it is beneficial to have some personal interest in the companies you are trading, and in this case it is quite easy to do so. The company is behaving strongly, and is a good prospect for spread betting.
SABMiller Rolling Daily
SABMiller is a large brewing company, actively acquiring further breweries and extending its worldwide range. The daily rolling bet is priced at 2376.1 selling price, and 2380.9 buying price. If you’re feeling bullish about its immediate future, you might consider placing a long bet at the buying price of 2380.9 for £4.50 per point.
If you are proved correct, and the stock rises in price, then you could close your trade and take your profit when it reaches 2525.7 – 2530.3. Working out how much you have won, your spread bet started at 2380.9 and it finished at 2525.7 for a gain of 144.8 points. With a stake of £4.50 per point, that works out to a profit of £651.60. To set against that, with a rolling daily bet, there may be a small charge each evening the bet is rolled over, but this is usually not significant if you are holding the bet open no more than a few weeks.
However, a lot of the time your bets will not succeed, and you should anticipate where you will exit a trade for a loss, to prevent further damage. Say the price dropped to 2267.6 – 2271.9, and you closed the bet for a loss. Your bet was placed at 2380.9, and it closed at the selling price of 2267.6, giving you a loss of 113.3 points. For your selected wager size, that amounts to £509.85 lost.
You could also take out a stoploss order when you place the bet. This will automatically close a losing position for you before it gets very large. If you had done this, you might find that the losses were less. Perhaps the stoploss order would take you out of the trade when the price was 2315.2 – 2319.6. As before, your starting price was 2380.9, but this time the closing price was 2315.2. 2380.9 minus 2315.2 is 65.7 points. Multiplying by £4.50, you would have lost £295.65.
SABMiller Futures Based Spread Bet
It is important that you look at the technical indicators and the charts before placing a spread bet, so that you have the best chance of success. The current far quarter quotation for a spread bet on SAB Miller is 2388.0 – 2400.0. If your analysis suggests that the price will be falling, then you would consider a short bet, selling at 2388.0 with a stake of perhaps £5.50 per point.
Consider first that your analysis works out, and that the price drops to 2253.2 – 2265.0, when you close your trade and collect your winnings. Your bet started at 2388.0, and it closed at 2265.0, the buying price as this was a short bet. The difference between these is 123 points, and multiplying this times your stake you find that you have won £676.50.
No matter how careful your analysis, you may have done nothing wrong but the price still goes in the opposite direction. That is the nature of trading the financial markets, and you must be prepared to lose some of your bets. Say the price rose to 2486.7 – 2498.3, and you decided to cut your losses and close your bet. The bet started at 2388.0, but this time it closed at 2498.3, which gives you a point difference of 110.3. With your stake of £5.50 per point, this works out to a loss of £606.65.
Many traders like to use a stop loss order, which they place at the same time as taking out the original bet. This tells your spread betting provider to close a losing bet when it reaches a level that you dictate, so it saves you having to watch the market prices all the time to mitigate your losses. If you had used a stoploss order, you might find that the spread bet was automatically closed for you when it reached 2449.6 – 2460.3. The bet was closed at 2460.3, and taking away the starting price of 2388.0 you find you have lost 72.3 points. This amounts to a loss of £397.65.
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