Spread Bet on Sage Group Shares | Trade Sage Group
The Sage Group PLC, also known simply as Sage, is an enterprise software specialist company with a worldwide reach. It is head-quartered in Newcastle upon Tyne in the UK and is the third largest supplier of business software in the world, behind Oracle and SAP. Its products are available in more than 160 countries, and it has more than 6 million customers.
The Newcastle-upon-Tyne firm was founded in 1981, originally to develop accounting software for small businesses. In 1984 it developed Sage software for the Amstrad computer, working on the CP/M operating system. This was a critical development, and the company went on to be listed on the London Stock Exchange in 1989 as a £24 million market cap. It made the FTSE 100 by 1999 and blossomed to a £3.7 billion market cap. Although the initial expansion was based on its own endeavours, recently expansion has been more by acquisition of other businesses. For instance, it acquired Peachtree in the US, Ciel in France, KHK in Germany, Sesam in Switzerland, and many others.
This monthly price chart gives an overall picture of the growth of Sage in recent years. You can see the effect of the global economic crisis, from 2007 to 2009, but growth has continued since then and exceeded previous records. There is considerable volatility in the price, as you can tell from the length of the candles and their wicks. As the share price is only a couple of hundred pence, a price movement of 30 or 40 pence is a major move (the long candlestick on the right is approximately 50 pence in one month).
This means that when you are spread betting, you may need to stake a higher amount than you usually do in order to capture the moves for a decent profit. You should always calculate your risk and return for every trade that you make to ensure that you do not over leverage your account.
Sage Group Rolling Daily
The enterprise solution software company Sage has a value of about £2.50 per share, which means that the size of your wager may need to be larger than usual, as even a 10% move would only be 25 pence. The current price for a rolling daily bet is 250.35 – 250.85. If you think that the price is going downwards, you may be tempted to place a spread bet for £25 per point at the selling price of 250.35.
If you are correct, and the price goes down to 217.96 – 218.46, you could close your spread trade and collect your winnings. The starting price for your short bet was 250.35, and it closed at 218.46, the buying price because this was a sell bet. 250.35 minus 218.46 is 31.89 points. With a wager size of £25 per point, that would give you a profit of £797.25.
Whenever you are trading on the financial markets, you must accept that some of your trades will fail, and be prepared to accept your losses. Say the price went up to 276.92 – 277.42, and you decided to cut your losses and close the spread trade. The bet was opened at 250.35, and it closed at 277.42. 277.42 less 250.35 is 27.07 points. Multiplying by your stake of £25 you would have lost £676.75.
Many traders use the stoploss order to control their losses. It is convenient, as the stoploss order ensures that a losing trade will be closed, even if you are away from your desk doing something else when the market moves. If you had used a stoploss order on this losing trade, you might find that it closed when the price went up to 265.31 – 265.81. The bet was placed at 250.35 and closed at 265.81, for a difference of 15.46 points. For your chosen size of bet, this would have cost you £386.50.
Sage Group Futures Based Bet
The business software solutions group Sage has seen good growth over recent years. The current spread betting price for a futures style far quarter bet is 250.71 – 253.74. If you think that the price will go up, then you might place a buy bet for £15 per point.
Suppose that you are correct, and that the price goes up to 283.42 – 286.35, at which point you decide that you want to collect your winnings. The starting price was 253.74, and the spread trade closed at 283.42, the selling price. That means you gained 283.42 minus 253.74 points, which is 29.68 points. With a bet of £15 per point, this gives you a profit of £445.20.
On the other hand, if you’re not correct and the price goes down after you placed your long bet, then you may have to close your trade and accept your loss when it reaches 225.36 – 228.40. In this case, the starting price was the same at 253.74 but the trade closed at 225.36. The difference between these two numbers is 28.38, so at £15 per point you have lost £425.70.
Accepting your losses and minimizing them is one of the keys to having a chance of success in spread betting. Even so, you cannot always be watching the market to judge the best time to give up, close the trade, and cut your losses. That is why a stop loss order is useful, as it will close your trade whether or not you are aware of the market movements. If you had a stoploss order on this trade, you might find that it closes your losing spread bet at a level of 235.16 – 238.10. Your opening price was 253.74, as before, but the closing price was 235.16. This is a difference of 18.58 points, which works out to £278.70 lost.
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