Spread Bet on Polymetal International Shares | Trade Polymetal
Polymetal International is in the highly variable and contentious mining field, which should provide many opportunities for profit from the volatility. The company was originally established in 1998 in St. Petersburg, Russia, and it undertakes the whole range of mining tasks from exploration to production. It currently has five major mining projects running. It is a leading precious metals producer in Russia, being the largest silver producer and the fourth largest gold producer. It also has a sideline producing copper as a byproduct of gold production. It is also listed on the Moscow Stock Exchange. It was first introduced to the London market with an initial public offering (IPO) in 2007, and opened to the main markets of the London Stock exchange in 2011. This is the first Russian founded company to obtain a premium listing on the LSE.
This weekly price chart shows the share price progress since that time. The precious metals market has been doing fairly well in recent years, given the doubt and uncertainty of the global economic position and the impact that this has on fiat currency values. Gold is the headline precious metal, but silver is also becoming increasingly important and rare, and may even exceed historical price levels against gold.
However, in the marketplace the mining and discovery companies are the most volatile and prone to sudden collapses or booms, as most of their value is based on discoveries. Polymetal currently produces about 1,000,000 ounces of gold per year, and claims reserves of about 15,000,000 ounces which includes silver and copper as well.
If you are looking for a volatile and exciting stock to spread bet on in the precious metal industry, then Polymetal may suit you. It is operating as efficiently as it can, working five different regions and using regional production facilities for efficiency. Despite the decline in price since 2011 it appears there is good value in its operation and experience.
Polymetal Rolling Daily
The current rolling daily price for shares of Polymetal is 800.2 – 801.8. It has not been listed as a premium stock on the London Stock Exchange for very long, and therefore there is little track record on which to test your strategies. Coupled with this, the mining exploration field is notorious for volatility in pricing. Therefore if you spread bet on this stock, be sure that you are cautious about preserving your capital.
If you think that the stock will go down in price, you could place a short or sell spread bet at 800.2, staking perhaps £8 per point. With a sell spread bet, you should not suffer charges to your account when rolling over the bet each evening. Assume that you are right and the price goes down to 736.1 – 737.7. Working out how much you have won if you close the bet at this point, you subtract the buying price of 737.7 from the selling price of 800.2 when you entered your bet. That gives you 62.5 points. If you multiply by £8, your total winnings work out to be £500.
Of course, prices can go up as well as down and you may find that this bet does not profit, but turns out a loser. If the price goes up to 846.7 – 848.3, you could decide to close the bet and cut your losses. The bet started at 800.2, and closed at 848.3. That means you lost 48.1 points. If you multiply that by your stake, your losses amount to £384.80.
It is usually worth considering placing a stop loss spreadbet when you take out a new position. This means that your bet will be closed for you by your spread betting provider if it reaches a certain loss level, and saves you having to keep in touch with the market all the time. If you had done this, you might have found that you would be taken out of the losing position when the price quote was 834.1 – 836.3. In this case, your starting price was still 800.2, but the position was closed out at 836.3, for a loss of 36.1 points. That would have cost you £288.80.
Polymetal Futures Based Bet
Polymetal is a mining and production company based in Russia and Kazakhstan. If you think that its shares will increase in price, you might want to place a long bet for £10 per point on the far quarter futures style bet, which is currently quoted at 801.5 – 811.2. If you are correct, and the price goes up to 863.1 – 871.3, you could close your trade and collect your winnings.
This is how you work it out: –
- your starting price was 811.2
- the closing price was 863.1
- the difference in points was 863.1 less 811.2, which is 51.9
- 51.9 times £10 is £519 profit.
Unfortunately, you may not be a winner and the price could fall after you placed the bet. Say it fell to 769.4 – 775.6, and you decided to close your trade and cut your losses. The starting price was still 811.2, but this time the spread bet closed at 769.4, a loss of 41.8 points. At £10 per point, you have lost £418.
It is hard to keep track of prices all the time, particularly if you have several spread bets open. What many traders do is to set stop loss orders for each of their spread bets, which involves telling your broker at what level of loss, assuming there is a loss, you want him to close the trade. This usually works out okay, even though the price at which the trade is closed is not guaranteed. The stoploss order simply becomes a market order to sell. Say the stoploss order took you out of this losing trade when the price was 783.0 – 792.5.
In this case your bet was opened at 811.2, but it closed at 783.0. 811.2 minus 783.0 is 28.2 points. For your stake of £10 per point, this amounts to a loss of £282.
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