Spread Bet on Kingfisher | Trade Kingfisher Shares
You may not have heard of Kingfisher PLC, but if you have ever used B&Q you have contributed to its profits. Kingfisher is the leading home improvement retailer in Europe, with various brands in Asia and Europe, and it claims to be the third largest home improvement retailer in the world. The only two home improvement companies ahead of it are Home Depot and Lowe’s, both of which benefit from being in the large North American market.
Most people are familiar with home improvement stores, selling kitchen, bathroom, gardening, and general do-it-yourself products. Kingfisher PLC has 955 stores, which are mainly in the UK, as well as Ireland, France, Spain, and other countries. It also has an alliance with Hombach Holding AG, another DIY retailer.
The company was formed in 1982 following a typical buyout story. In this case it was the well known Woolworths chain bought out by Paternoster Stores limited, with the name being changed to Woolworth Holdings PLC. Further acquisitions included B&Q, Superdrug, and Comet. The name was changed to Kingfisher PLC in 1989. The company went on to make European acquisitions such as Castorama in France, Poland, and Russia, and these acquisitions contributed to it becoming the largest retail business in the UK. In 1999 Kingfisher fought with Walmart, but failed in its bid to take over Asda. The company went through some reorganization, with various demergers, including selling off Woolworths, and came out the other side devoted to DIY.
In recent years the company has undertaken further reorganizations and a determined growth plan, unifying and refocusing its endeavours. Despite various setbacks in its history, it may have found the formula for continued growth in a competitive market.
This daily price chart shows that, despite its recent optimism, Kingfisher PLC is still subject to the ups and downs of the market. Looking at the longer picture, it appears to be in an uptrend so the downward movement in price shown above may simply be a retracement in that trend.
How to Spread Bet on Kingfisher Shares: Rolling Daily
Kingfisher it is a home improvement retailer, and following management reorganizations is looking forward to growth in the future. The current price quoted for a daily rolling spreadbet is selling price 270.93, buying price 271.47. If you think that the current retracement is going to continue, you might place a short or sell bet on the shares, staking say £20 per point at the price of 270.93.
It could be that you have read the market correctly, and that the price drops to 236.52 – 237.06. If you choose to close the bet and take your profit, then you can work out how much you have won. Your spread bet was placed at 270.93, and it closed at the buying price of 237.06. Taking one away from the other, you have gained a total of 33.87 points. If you multiply this times your stake, you will find that you have won £677.40.
Of course, a lot of the time you may not be able to read the market that well, and the price will go in the opposite direction to your bet. Say the price instead climbed to 293.67 – 294.21, and you decided that you had to close your bet to prevent further losses. The price at which you opened your short bet was 270.93, and it closed at 294.21. 294.21 minus 270.93 is 23.28 points, against you as the price increased, which means you have lost 23.28 x £20, which is £465.60.
As a further example, many spread traders decide to use stop loss orders when they take out a bet, this saves them watching the price moving from day to day, and means that the spread betting company will close a losing bet for them. Say the price went up to 285.26 – 286.31 and your stoploss order closed the bet for you. This time you would have lost 286.31 less 270.93, which is 15.38 points. At your chosen stake, this amounts to £307.60.
Kingfisher Futures Style Bet
Kingfisher, owner of do-it-yourself stores like B&Q, has been in a general uptrend, so you may choose to take a medium-term spread bet on its shares. Current pricing for the far quarter futures spread bet is 271.43 – 274.70. Suppose you place a long bet for £12 per point at the buying price of 274.70.
Consider that the uptrend continues, and in a few months you are able to close the spread bet at a price of 298.52 – 300.46. This represents a gain from the buying price from 274.70 to the price of 298.52, which is 23.82 points. If you multiply that times your stake, you find you have won £285.84.
Of course, as with all financial trading, you must allow that sometimes your spread trades will not work, and perhaps in this case the price fell instead of increasing. You might choose to cut your losses and close your bet when you see that the price is 250.26 – 253.14. You bought the bet at 274.70, and sold or closed it out at 250.26. That means you lost 24.44 points. At your stake of £12 per point, you would have lost £293.28.
Because of the uncertainty which way the price will go, you should always try to keep the value of your losses lower than your wins. That way, even if you lose as many times as you win, you should come out ahead overall. Some spread traders use a stop loss order to keep an eye on the market for them, and make sure that losing bets are closed before they get too large. If you had set a stoploss on this bet, you might find that it was closed for you when the price fell to 258.72 – 261.50. In this case your opening price, as before, was 274.70, but your closing price was 258.72. That means you have lost 15.98 points. At your chosen stake, this would have cost you £191.76.
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