Spread Bet on ITV | Trade ITV Shares
ITV is a media company that operates many of the regional broadcasters making up the ITV network, the oldest commercial television network in the United Kingdom. Technically speaking, the ITV network is a “free to air” network, unlike the subscription services that you can buy from satellite and cable broadcasters. The programming is freely available over the airwaves, but paid for by advertising revenues which accounts for about two-thirds of group revenue. The network has been in existence since the early days of television, and has always competed with the non-commercial BBC channel for viewers.
This company was formed by a merger between Granada and Carlton in 2004, and this was just the last in a long series of mergers between the different franchise holders. This final merger produced many redundancies, because of duplication of studio facilities around the country. Many of the names of the franchisees are familiar to UK residents – Yorkshire Television, Anglia Television, etc.
Running the TV commercial networks for the UK is only part of the business of ITV, as it also produces videos and original programming for buyers worldwide. It has production centres around the world including the UK, USA, Germany, France, Spain, and Australia, and it produces hits such as Come Dine with Me, Dancing on Ice, Hell’s Kitchen, and I’m a Celebrity Get Me out of Here! It also distributes third-party programming internationally, and of course uses the DVD market for its goods.
Once hit by hard times, itv has reorganised itself and is now flying high although of course some challenges remain; one being that the company wants to become less reliant on advertising. Furthermore, the industry continues to evolve with other broadcasters (such as Sky) beginning to produce their own programmes. ITV is now split into two distinct divisions. Broadcast & Online. The ITV Studios division produces and sells programmes and formats. It is the largest production company in the UK, producing programmes for ITV and other stations including channels 4 and 5. In addition, ITV has five international bases producing programmes for local broadcasters in the US, Australia, Germany, France and the Nordic countries.
The company has about 22.3% viewing share in the UK, behind only the BBC and a 45.8% share of the UK television advertising market. Interestingly, ITV claims that television has maintained its share of advertising spend over the last few years, despite the internet continuing to erode the market share of press advertising. Aside from advertising, Broadcast & Online also delivers multiple-platform programming, such as ITV Player, allowing access to on demand services through Virgin, Sky, Netflix and LoveFilm.
In the 21st century there have been numerous rumours of friendly and hostile takeovers, and these involve Richard Branson and the NTL group, and British Sky Broadcasting among others. This means that this type of stock is particularly vulnerable to unpredictable moves on news stories, and therefore when you are spread betting you must be careful to protect your capital, and honour your stop positions.
How to Spread Bet on ITV Shares: Rolling Daily
There can hardly be a person in the UK who has not heard of ITV, and probably spent many hours viewing the programming. ITV plc covers more than simply the commercial TV network, and includes other media production and delivery. The current price for a daily rolling spreadbet is 82.42 – 82.58. Therefore if you want to place a bet on it that the stock price will go down, this short bet would go on at 82.42 and could be for a value of, say, £10 per point.
Consider first the case when your bet is proved correct, and the price drops to perhaps 73.56 – 73.72. You could then close your bet and collect your winnings. A sell bet closes at the higher price, in this case 73.72. That means that you made the difference between these two prices of 82.42 and 73.72, which is 8.70 points, and multiplying by your stake that amounts to £87.
Secondly, perhaps the price does not go in your direction, and you watch as it steadily creeps upwards. After a certain time, perhaps when it reaches 90.31 – 90.47, you decide that you must close the bet and accept your loss before it becomes any greater. Once again, your short bet closes at the higher price, here 90.47, and taking away the starting price of 82.42 you have lost 8.05 points. For your chosen stake, this is £80.50.
Finally, you might have chosen to set a stoploss order when you opened the bet. This allows you to go away, and the losing bet will be closed by your spread betting company without any further action on your part. Suppose this closed the bet for you when it reached 86.65 – 86.79. The bet opened at 82.42, and it closed at 86.79. 86.79 minus 82.42 is 4.37 points. You staked £10 per point, so you lost £43.70.
ITV Futures Style Spread Bet
If you want to take a longer view on the fortunes of ITV PLC, then you could consider a futures style bet. The monthly chart below shows that the price has been fairly volatile.
From this and from other analysis you may decide to take out a long or buy bet, staking £15 per point on the far quarter pricing of 82.60 – 83.59. If you are correct, the price might go up to 95.62 – 96.58.
Working out how much you would have won, the starting price was 83.59, the buying price. The bet was closed at the selling price of 95.62. The difference between these is 12.03, so with a stake of £15 per point you have won £180.45.
Of course, the market can go in the wrong direction, and even successful traders find it happens to them fairly often. Say the price had dropped to 73.14 – 74.05, and you decided to close the bet to cut your losses. The starting price was still 83.59, but this time the spread bet was closed at 73.14. 83.59 less 73.14 is 10.45 points. For the stake that you chose, this would have cost you £156.75.
One of the important ways that you can become a winning trader is to make sure that you do not lose too much. If the bet goes against you, you need to close it quickly and save your funds. Many spread betters use the stoploss order, which is usually placed when they take out the bet and tells the spread betting company to close the losing bet for you when it reaches a certain level. Say you had done this, and the bet was closed at 77.92 – 78.88. With a starting price of 83.59 and a closing price of 77.92, you have lost just 5.67 points. Multiplying by your stake of £15 per point, this would have cost you £85.05.
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