Ashtead Group is a major rental company in both the UK and the US, renting out industrial equipment for construction and other purposes. The weekly price chart below shows that, while there is a tendency to trend, the volatility is not excessive, and this should be borne in mind when spread betting on the stock.
The other point of note on prices is that there are some gap opens on the daily chart, which may need particular caution when trading.
Ashtead got its name from the town where it was originally founded, in 1947, as Ashtead Plant and Tool Hire. It now operates from the City of London, and has been listed on the London Stock Exchange since 1986. It acquired Sunbelt Rentals in 1990, and NationsRent in 2006. It is the second-largest rental company in both the UK and the US, and it operates in the US under the Sunbelt Rentals name, based out of Charlotte, North Carolina. In fact the majority of its business nowadays is transacted in the US.
The company provides large industrial items such as work platforms, backhoes, excavators, and forklift trucks, as well as smaller gear such as ladders and power saws. In the UK it is also known under the name A-Plant.
Despite difficulties during the global economic recession, Ashtead has rebounded and now trades well above its high of 224 previous to the recession. The concern when spread trading on this stock is that sometimes large moves or gaps have been noted in its price. Of course, if you are cautious you could place Guaranteed Stop Loss (GSL) bets that would limit your exposure for certain, but as these require a larger spread they also limit your profits. If you want to trade on Ashtead, then you have to weigh up the pros and cons of the two approaches.
Ashtead Group Rolling Daily: How to Spread Bet on Ashtead Group Shares?
The current spread betting quotation for Ashtead is 390.32 – 392.28. It is in an upward trend, and if your technical analysis suggests that this trend will continue you may wish to place a buy bet, going long at 392.28 and staking perhaps £6.50 per point.
For the sake of example, first assume that this bet works out and the price goes up to 453.62 – 455.58. You can close your bet and collect your profit, and the closing price will be 453.62. 453.62 minus 392.28 is 61.34 points. With a wager of £6.50 per point, this bet would have won you £398.71.
It is said that winning traders don’t necessarily have a greater percentage of winning positions. What they do is minimize their losses on losing trades, and maximize their gains. Therefore you should be prepared to close a losing bet for a loss, and move on to the next spread trade. Suppose the price fell after you placed your bet, and you found that you had to close the trade when the quote was 345.93 – 347.89. This time your closing price would be 345.93. The difference between this and the starting price of 392.28 is 46.35 points. Applying your bet size to this loss, this losing trade would have lost you £301.28.
It is often useful to place a stop loss order when you take out a bet. This requires your spread betting company to close your trade if it reaches a certain level of loss, which you set. It saves you having to keep a close eye on the prices. With a stop loss order, this losing trade might have closed earlier, at 357.65 – 359.61. The bet opened at 392.28, as before, and the stop loss order closed it for you at 357.65, which means you lost 34.63 points. At £6.50 per point, your losses this time would be £225.10.
Ashtead Group Futures Style Bet
Ashtead Group is in an uptrend, and you may want to spread bet on the trend continuing for some weeks or months to come. If you place a quarterly futures based bet, then you do not have to worry about rollover adjustments to your account, and can wait for the profits to come in. The current price for a far quarter bet on Ashtead is 391.18 – 395.90. Say you staked £8 per point on a long bet at the buying price of 395.90.
As an example, say that the price goes up as you hoped, and you decide to close your bet and collect your winnings when the quote is 453.65 – 457.81. Your spread bet was placed at 395.90, and it closed at 453.65. 453.65 minus 395.90 is 57.75 points. You staked £8 per point. Multiplying this out, you would have won £462.
For a second example, say that the bet did not work out, and that the price went down to 351.02 – 355.20. When it reached that level, you decided to close the spread bet and accept the loss, before it went down any more. The spread bet was placed at 395.90, as before. This time the bet was closed at a selling price of 351.02. Taking one away from the other, you find that you have lost 44.88 points. At £8 per point, this amounts to a cost of £359.04.
Finally, you may want to consider the merits of placing a stoploss order when you take out your bet. With a stoploss order, you do not have to keep watching the prices for fear that your bet will lose you a fortune. If you place your stoploss carefully, your broker will close the losing bet for you before your account is decimated. With a stoploss order on this bet, it might have closed at 365.52 – 369.24. 395.90, the starting price, less 365.52, the closing price, is 30.38 points, and that would amount to a loss of £243.04.