Spread Betting Experian | Trading Experian Shares
Many Americans who know of the Experian Group as one of the big three credit reporting agencies (the other two being Trans Union and Equifax), would be surprised to learn that Experian is an Irish based company, with corporate headquarters in Dublin, in the Republic of Ireland. The company operates in 41 countries, employing 15,500 people.
It started in Nottingham as CCN systems, owned by GUS PLC. GUS went on to buy the US business, Experian, and combined it with CCN systems, retaining the Experian name. Throughout the years, there have been many acquisitions and changes. For instance, in 2004 Experian bought CheetahMail, an early e-mail marketing group. In 2005 the Federal Trade Commission (FTC) fined Experian for deception over its “free credit report” which enrolled inquirers into a subscription credit monitoring program. In 2006, Experian purchased the Canadian credit bureau, Northern Credit Bureau. In 2007, Experian acquired a majority shareholding in Serasa, a Brazilian credit bureau which is now the largest in the world.
It wasn’t until 2005 that Experian separated from GUS PLC and became listed on the London Stock Exchange. Though the Canadian operations were shut down in 2009, in 2011 Experian continued its acquisitions with Computec, a credit services provider based in Colombia.
Credit services have become increasingly sophisticated, and Experian has divisions dealing with marketing solutions, decision analytics, and interactive services. It deals with North America, Latin America, UK and Ireland, Europe, Middle East, Africa, and Asia Pacific, but the majority of its work is still in the United States.
For the most part, share pricing for the Experian Group is stable and has been steadily growing since 2008/2009, when it was hit by the global economic crisis. The daily price range is no more than 20 points, with some exceptional days of around 30 points, so this is a share which would be suitable for the beginning spread better, and should not produce too many surprises.
How to Spread Bet on Experian Shares: Rolling Daily
The large credit bureau Experian, well known in the USA, is head-quartered in Ireland and quoted on the London Stock Exchange. The current price for a rolling daily bet is 979.5 – 981.5. If you think that the stock price will be going up, you might want to place a buy bet on this security, staking perhaps £13 per point at the buying price of 981.5.
Supposing that you are correct, the price may go up to 1024.2 – 1026.2, and you could close your spread bet to take your profit. To work it out, first you calculate the point difference. The long bet went on at 981.5, and it closes at the selling price of 1024.2. The difference between these numbers is 42.7 points, which multiplied by £13 is £555.10.
It is important to realize when financially trading that no one is able to accurately predict which way the markets will go, and therefore you must always allow that your spread bet can lose. Perhaps in this case the price would go down to a level of 948.6 – 950.6, and you would be faced with having to close your spread trade to prevent further loss. Your bet was made at 981.5, but this time it closed at 948.6. 981.5-948.6 equals 32.9 points. Multiplying by your stake, you have lost £427.70.
Many spread betters and traders use a stop loss order to take care of closing their trade if it goes against them. The stoploss order tells the spread betting company to close your bet if the price reaches a certain level, though it does not guarantee the price at which your bet will be ended. Say it triggered and your spread trade was closed when the price reached 957.2 – 959.2. This time you have lost 981.5 less 957.2 points, which is 24.3 points, for a loss of £315.90.
Experian Futures Based Bet
The credit reporting agency Experian has had steady growth since the global economic crisis a few years ago, and the current futures prices for the far quarter are 982.1 – 993.9. If your analysis suggests that the uptrend is entering a retracement, you may want to place a sell or short bet for £15 per point, and this would go on at the price of 982.1.
Perhaps you are correct, and the price retraces to a level of 953.6 – 963.2. If you close your trade now and take your profit, you can work out how much you have won by multiplying the point difference times your stake. The point difference is 982.1 less 963.2, or 18.9. 18.9 points times £15 gives you a profit of £283.50.
Though this is a futures based bet, and does not expire for another eight months, you can close it whenever you want at the then current price. Suppose that the price continues to climb after you placed the bet, you might decide to cut your losses by ending the spread trade when the price reaches 990.3 – 998.6. The original bet was placed at a price of 982.1, and has now closed at 998.6. This means the points difference is 16.5. Multiplying this times your stake of £15 per point shows that you have lost £247.50 on this bet.
Many people do not have the time or inclination to watch the price charts all the time, and that is when a stop loss order can be valuable. The stoploss order will close the trade for you once a certain level of loss is reached, and you do not have to be watching the markets. Say you placed a stop loss order on this spread bet when you opened it, you might find that the trade was closed when it reached 986.2 – 995.3. In this case, the number of points you have lost is 995.3-982.1, which is 13.2 points. Even though you were not watching the market, having a stop loss order kept your losses down to £198.
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