Spread Bet on InterContinental Hotels Shares | Trade InterContinental
InterContinental Hotels Group, sometimes referred to as IHG, is a British multinational group, and the largest hotel company in the world when measured by number of rooms. It has thousands of hotels in over 100 countries, and many familiar names such as Holiday Inn are part of the group. The primary listing is on the London Stock Exchange, and there is a secondary listing on the New York Stock Exchange.
The company traces its origins back to the 18th century, when the Bass breweries were founded. Because of action by the British government in 1989, Bass decide to invest in hotels as a diversion from pubs, and it purchased Holiday Inn, entering the US market. Meanwhile, the InterContinental brand had been established as a division of Pan Am Airways in the 1940s, and was sold to the British hotel group Grand Metropolitan in 1981. Grand Metropolitan sold it on in 1988 to a Japanese group, which sold it back to the UK in 1998 when Bass bought it. Subsequently, Bass sold off its brewing assets together with its name in 2000.
IHG is principally concerned with managing hotels owned by others, and with franchising its hotel brands. This is a common model in the industry, with IHG providing support and expertise along with brand advertising, leaving the day-to-day administration of the real property to others. There are some corporately owned hotels, but these are mainly owned by their partners.
You can see from this monthly price chart that IHG had a bad couple of years, but it has generally recovered and performed well latterly. Given the name recognition of all its brands, including Holiday Inn, the number two hotel brand in the world, Crowne Plaza, Candlewood Suites, and a new one called Even Hotels, you may expect that the share price will continue to grow overall.
Those are the fundamentals of the company, and you can see that it has active pricing chart which would be suitable for technical analysis for spread betting.
InterContinental Hotels Group Rolling Daily
The InterContinental Hotels Group has a number of well-known brands, and operates in 100 different countries. Much of its business is in franchising and professional advice, thus it is not exposed to the ups and downs of real estate valuations, but to the vagaries of the travelling public. The current spread betting quotation for a rolling daily bet is 1484.5 – 1487.5. After careful technical analysis, you might decide that the price will go up in the next few days, and therefore place a long or buy bet on the shares, staking perhaps £3 per point.
After a few days, you might find that the price had risen to 1543.7 – 1546.7, and decide that you wanted to collect your winnings. Your spread bet was placed at the starting price of 1487.5, and it closed at 1543.7, a gain of 56.2 points. With your stake of £3 per point, you have profited £168.60. During the days when the bet was open, you may have been charged a slight amount each evening to your account when the bet was rolled over, and this usually does not amount to much.
On the other hand, the price might have gone down after you placed your bet, and you would have to decide to cut your losses and exit a losing spread trade to avoid losing even more. Perhaps the price went down to 1446.5 – 1449.5 and you decided that was far enough, and closed your spread trade. The bet went on at 1487.5 as before, but this time it closed out at 1446.5. You have lost an even 41 points, which is worth £123.
You might have chosen to place a stop loss order on this spread bet when you took it out, to save you having to check the market if it lost. Perhaps this would have got you out of your spread bet earlier, when the price was quoted at 1459.8 – 1462.8. In this case the closing price was 1459.8, and taking that away from 1487.5 you only lost 27.7 points. That would have cost you £83.10.
InterContinental Hotels Group Futures
The InterContinental Hotels Group is a large company which franchises and provide expertise to many owner operators of its familiar brands. As such, it has been making good growth in the last few years. If you want to take a longer-term view on the share price, and take out a futures style spread bet, the current price is 1490.7 – 1502.7 for the far quarter.
Said you thought the price was due for a pullback in the next few weeks, you might spread bet on a short position with a wager of £5 per point. The bet would go on at 1490.7, the selling price. If you turn out to be correct, you might find the price drops to 1408.1 – 1419.6, and then decide to close your bet and collect your profits. Your bet was placed at 1490.7, and it closed at 1419.6, which means you gained 71.1 points. Multiplying by £5, your total winnings are £355.50.
When you start spread trading, you rapidly discover that many of your bets will not make a profit. The key to success in the long run is to win on average, taking as much profit as you can from each winning spread bet, and trying to lose as little as you can when you have no choice. Perhaps the price of IHG continued to climb, and you decided to close your bet for a loss when it reached 1546.2 – 1558.0. The starting price was 1490.7, and your bet closed at the buying price of 1558.0. That means you lost 67.3 points, which amounts to £336.50.
Many spread betters use a stop loss order to take them out of a losing situation automatically, and often sooner than manually watching the market. In this case, perhaps a stop loss would have closed your bet at 1532.6 – 1543.8. Once again, the starting price was 1490.7, but this time the bet closed at 1543.8. That means you lost 53.1 points, and that would have cost you £265.50.
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