Spread Betting BT Group
If you want to spread bet on a company that you are familiar with, you might well consider betting on the shares of BT Group. This company and its predecessors has been around since 1846, when it started a commercial telegraph service, calling itself the Electric Telegraph Company. The telephone service in the UK was provided by private companies when it started, although because of the national nature of the services it has at times come under government control.
In 1984, the government passed an act to sell more than 50% of the shares in what was then called British Telecom, which had been formed in 1980 and dissociated from the post office in 1981. The rest of the shares were sold off to private investors in 1991 and 1993. The 1984 act also allowed competition, taking away BT’s monopoly in running telecommunications systems, and allowing companies like Mercury to compete.
In 1991, the company revised its corporate image, and emerged as BT. Under this reorganization, it established various divisions to deal with private citizens, small companies, and large multinational corporations. Its current operation includes four main divisions.
The BT Retail division gives a range of services to individual consumers and small businesses in the UK. This division also takes care of phone directories and payphones. The BT Wholesale division offers services to other communications providers who are then at liberty to retail their offerings in the UK. The BT Openreach division is charged with allowing other communications providers to connect to the telephone exchanges, giving access to the UK network. Finally, there is a BT Global Services division which is responsible for major services such as IT, applications management, and professional services to corporate, carrier, and government organizations around the world.
While BT no longer has a monopoly, it is a major player in telecommunications and data transmission in the UK. While its shares suffered dramatically during the global economic crisis, it is now back to 2005 levels and growing steadily.
How to Spread Bet on BT Group Shares Rolling Daily
As you can see from this chart, which gives the monthly stock prices, the BT Group is in an overall up-trend. When you want to place a spread bet on a rolling daily basis, you would of course look at the daily chart to determine a suitable bet and direction. The current price for a rolling daily bet is 216.88 – 217.42.
If you decide by looking at the chart and analysis that the up-trend will continue, you might choose to place a long bet on the BT Group at a price of £12 per point. If you are correct, the price may go up to 253.71 – 254.23, and you could close your spread trade and collect your winnings. For this spread bet, you wagered £12 per point at an opening price of 217.42, and the trade closed at the selling price of 253.71. That means you gained 36.29 points, which multiplied by the stake shows you a profit of £435.48. As this is a rolling daily bet, your account may have been charged a little interest each evening while you held the bet, but this usually does not amount to much.
On the other hand, the price may have fallen after you placed the spread bet, and you could decide to close and accept your loss when the price drops down to 191.36 – 191.90. In this case the bet opened at 217.42, as before, and closed at 191.36. That means you lost 26.06 points, which cost you £312.72.
To protect your account, you could instead have placed a stop loss order when you opened the spread bet, and this would close the bet for you if the price fell by an amount you set. Say the bet closed at 205.13 – 205.69 from the stoploss. In this case you have lost 217.42 less 205.13, which is 12.29 points. That would have cost you £147.48.
BT Group Futures Betting
If you are looking to profit from a spread bet over the course of a few weeks or months, you may consider wagering on the futures based price on BT Group. IG Index are quoting 217.45 – 220.07 for the “long future”, three quarters away. Perhaps you think that the BT Group is overpriced, and want to place a short or sell bet on it for £8.50 per point. The sell bet would go on at the lower price of 217.45.
Assume that you are correct, and that the price goes lower, you might decide to take your winnings when it reaches 195.36 – 197.95. To work out how much you have won, you first work out the difference in points. The bet was placed at 217.45, and closed at 197.95, the buying price. That means you won the 19.50 points, which is worth £165.75 for your chosen stake.
Inevitably, some of your bets will fail, and you will be faced with closing your bet and accepting your loss. It is a good idea to do this as soon as you realize that the price is not going to plan, as minimizing your losses is key to making a profit overall. Say the price rose to 233.76 – 236.21, and you closed the spread trade to avoid further loss. This time you have lost 236.21 less 217.45 which is 18.76 points. That works out to £159.46.
If you don’t have time to keep watching the price, or think you might hesitate to take a loss if the price moves against you, then it is a good idea to place a stop loss order when you take out the bet. This tells your spread betting provider to close the bet once a certain price is reached. If you had a stop loss order on this bet, you might find the spread bet closed when the price reached 228.62 – 231.10. The calculation of how much you lost is exactly the same. 231.10 minus 217.45 is 13.65 points. For your wager, that amounts to £116.03 lost.
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