Spread Betting Evraz | Trade Evraz Shares
Evraz started life in 1992 as a small metal trading company in Russia. During the first years, the company steadily expanded, becoming involved in holding promissory notes between Russian mining and metallurgy plants, and this led to Evraz becoming involved in equity stakes in the mines. By the mid-90s, it had interests in coal, ore, and steel companies. Taking on more debt from steel mills in Russia, the company grew until in 2005 it listed 1/12 of its value on the London Stock Exchange as global depositary receipts (GDRs). Another 6% was listed in the following year.
As a result of all this in 20 years Evraz has expanded from a metal trading company to a steel production business which is self-sufficient in iron ore and coking coal. It is currently ranked the 20th largest steel producer in the world. It has expanded into the USA, South Africa, Canada, and the Ukraine. The North American subsidiary produces approximately 5,000,000 tons of rolled steel and 1,000,000 tons of crude steel per year, and is centred in Portland, Oregon, but has eight operating locations in the US.
Being self-contained means that Evraz is not subject to the price fluctuations of steel producers who depend on outside markets. Its share price has been reasonably constant, as you can see below: –
Nonetheless you can see that there is price volatility which makes it suitable for spread betting, although kinder to the novice. Over several months the price has gone between 340 and 460, and it is currently moving sideways between 360 and 380. The Bollinger Bands are narrowing, which may mean that the breakout is to be expected shortly, but apart from such a dramatic move the chart shows that this is a relatively calm share on which to practise spread betting.
How to Spread Bet on Evraz Shares: Rolling Daily
Based on recent performance, you may expect that Evraz share prices will be relatively stable, and this may encourage you to stake a larger amount on your spread bet. Above all you must remember to protect your capital, and minimize your losses as far as possible. The current quote for a rolling daily bet on Evraz is 375.36 – 377.24. If you think it is going to go down in the short term, you might place a short bet for £20 per point.
If you are correct it may go down to 345.69 – 347.57, and you could cash in your spread bet and collect your winnings. Your short or sell bet was placed at 375.36, and it closed at 347.57. That means you have gained 375.36 less 347.57 points, which is 27.79 points. With a stake of £20 per point, you have won £555.80.
The downside to using a large stake is that your losses are also multiplied. Should you be wrong, and the price go up, then you might close your position for a loss when it reaches 392.12 – 394.00. Your starting price was 375.36, and your spread trade ended at 394.00. That is a difference of 18.64 points, which corresponds to a loss of £372.80.
Looking at its recent chart, you can see that the upper Bollinger Band is at 386. If the price breaks through that, then it is clearly not in a downtrend and you should close your spread bet. You can set a stop loss order when you open the bet which would automatically close a losing spread trade when it reached that level. Say it closed your trade when the price was 386.05 – 387.93. Your loss now is 387.93-375.36 points, which is 12.57 points. This would have cost you £251.40.
Evraz Futures Based Bet
If you are interested in the medium-term price moves of Evraz, then you may want to place a spread bet on the far quarter futures price of 376.90 – 381.45. Futures bets can work out better if you intend to hold this spread bet for several weeks or months. Suppose you think that Evraz will be going up in price, you can place a long or buy bet at 381.45, staking perhaps £25 per point.
Evraz has been relatively slow to move, but after a few months the price may go up to 406.92 – 410.53, and you can close your bet and take the win. This bet has captured 406.92 less 381.45 points, which is 25.47 points, which is worth £636.75.
Suppose you are wrong, and the price goes down. This will happen fairly often, so you must be careful to accept your loss and move on, rather than holding onto your spread bet in hope as it sinks lower and lower. Perhaps you would close the position when the price reached 360.92 – 364.98. Your starting level was 381.45, and the trade closed at 360.92, the selling price. The difference is 20.53 points, and multiplying by your stake you have lost £513.25.
Many spread betters and traders use stop loss orders to help minimize their losses. They place a stop loss order when they open the trade, and if the price goes against them, the stoploss order is triggered and closes the position. If you had done that on this bet, you might find that your spread bet was closed for you at 368.54 – 372.69. Once again your starting level was 381.45, and this time the trade closed at 368.54. This is a loss of 12.91 points. For a stake of £25 per point you would have lost £322.75.
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