Spread Betting on Capital Shopping Centres’ Share Price
Capital Shopping Centres is now a property investment company, with properties valued at about £7 billion, but it can trace its origin back to 1980 when as the Transatlantic Insurance Holdings PLC it started off in the life assurance business. In 1992 it combined with a leading shopping centre developer called Capital and Counties which brought it to be listed on the London Stock Exchange. But recently, it de-merged from Capital and Counties, and became Capital Shopping Centres Group in 2010.
It focuses on the retail sector, owning 14 shopping centres, and this includes catering and leisure activities. It is organized as a Real Estate Investment Trust (REIT), a structure that has only recently been introduced to the UK.
You can see from the weekly price chart above that it has no clear overall trend in the long-term, but has had several trends lasting a few weeks. This makes it an interesting prospect for the spread trader, as with careful selection of your spread bets you may be able to profit from each movement. Certainly there is more scope for trading than with a more steady price chart.
Having said that, you need to see whether it can be regarded as reasonably predictable, giving you a healthy percentage of winning spread bets. In June 2011 the Bollinger Bands narrowed, which typically can happen just before a breakout move, and in due course the price broke out heavily to the downside. This was also indicated on the MACD, shown below. The upswing towards the end of 2011 resulted from the support given by the lower band, and again was shown in the MACD turning up. The results may well be different looking at the daily chart, which is the minimum level of detail that you should choose for short-term trading, but it appears that technical analysis holds good for making a profit on this stock.
How to Spread Bet on Capital Shopping Centres Shares: Rolling Daily
Capital Shopping owns and manages several shopping centres, so you can expect it to be connected to the success of the retail trade, although as a landlord the rent should prove more constant than the shopping habits of consumers. The current quotation for a rolling daily spread bet is 327.07 – 327.73 with IG Index.
It may be that you think the price is going down, and so you want to place a short spreadbet on this security, betting say £7.50 per point. The short bet would be placed at the selling price of 327.07. If you are correct, you may find that you can take your profit when the price hits 283.61 – 284.27. Working out how much you made, you take 284.27 away from 327.07, to give 42.8 points, then multiply by your stake to get £321.
The financial markets are notoriously unpredictable, so you cannot guarantee that any particular spread trade will work. You need to concentrate on saving your capital and keeping your losses small. If you were wrong with your spread bet, and the price instead rose, you might find that you have to close your bet and accept your loss when the quote reaches 361.25 – 361.69. 361.69-327.07 is 34.62 points, which works out to £259.65 lost.
Many spread betters rely on stop loss orders to close their bet and take them out of a losing position. The stoploss order should be placed when you open the bet, then your spread betting provider will take care of closing your bet once a certain level is reached. Perhaps this happened when the price went up to 348.62 – 349.25. Working out how much you lost this time, you take 327.07 away from 349.25. This gives you 22.18 points. Your chosen stake was £7.50 per point, which means you have lost £166.35.
Capital Shopping Centres Futures
Capital Shopping is a volatile share, providing plenty of opportunity for profit coupled with risk that requires you to be careful to preserve your capital. The current spread betting futures based quote is 328.00 – 331.96 for the furthest quarter, expiring eight months away.
Taking a bullish view of this equity, you might decide to stake £12 per point on the buying price of 331.96. As this is a futures based bet, there is no adjustment to your account for rolling over the bet, and you can close it at any time up to the expiry date, whether because you are taking profits, or trying to minimize your losses.
Assume first that you are correct in your spread trade, and that the price increases up to 386.76 – 389.93. You could close your spread trade and collect your winnings. The total number of points that you won is 386.76-331.96, which is 54.8. Multiplying by your stake, you have won £657.60.
However, the price might have gone down after you placed your spreadbet, and you would be faced with the decision to close your spread bet at, say, 293.42 – 296.65. If this was the case, you would have lost the difference between the starting price of 331.96, and the closing price of 293.42, which is 38.54 points. For your chosen stake, you have lost £462.48.
Instead of having to watch the chart movements all the time, you might have placed a stop loss order on this spread bet when you opened the spread betting trade. Perhaps this would have closed your bet for you when it went down to 305.06 – 308.48. You can work out how much you lost in this case. The bet was opened at 331.96, and closed at 305.06, the lower or selling price. The difference is 26.9 points, so multiplying by £12 you have lost a total of £322.80.
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