For many, the name Ladbrokes is synonymous with betting. With thousands of betting shops across the UK, Ladbrokes is a common sight in the High Street, and so is probably familiar for many looking into spread betting, even though Ladbrokes’ operation does not include financial spreads but simply binary bets at the moment.
The daily price chart above shows quite a bit of variation, which is useful if you are trading on the shares, as long as you use an effective trading strategy.
Ladbrokes is known as a “gaming company”, and is London-based. It was founded as long ago as 1886 in Worcestershire, being named after a horse training property there, but moved to London in 1902. During the first decades, it operated as an exclusive bookmaking company catering for the aristocracy and upper classes. After the Second World War the company was in decline due to the general austerity. However, in the 50s the company was bought by Mark Stein, and with subsequent favourable legislation went on to establish a chain of betting shops.
The company was floated on the Stock Exchange in 1966, and has tried other types of business since then. It bought Texas Homecare in 1986, but sold that off in 1995. It acquired the Stakis Hotel chain in 1999, taking the name Hilton Group, but sold that in 2005. Its main new avenues of expansion are involved with the Internet, with online gambling websites including poker, casino, and other games.
Ladbrokes has been generally on the rise in recent years, although it is well below the pre-global crisis stock price levels, which were in the 300s. The up and down volatility of the stock price would seem to offer plenty of opportunities for spread betting, and the Bollinger Bands in conjunction with the MACD have shown reasonable predictive qualities.
Ladbrokes Rolling Daily: How to Spread Bet on Ladbrokes Shares?
It sounds strange to be betting on a betting shop, but Ladbrokes looks like a reasonable choice for spread betting, with volatility and opportunities for long and short positions. The current rolling daily price is 194.01 – 194.99. If you want to bet on the price going up, you could take out a long bet for £5 per point, and this would be placed at the buying price 194.99.
To see how this works, assume the price goes up as you hoped and that you are able to close your trade and collect your winnings when the quote is up to 232.62 – 233.60. With a long trade, the bet closes on the lower or selling price, this time 232.62. That means you have gained 232.62 minus 194.99 points, or 37.63 points. You decided to stake £5 per point, so your gain is 37.63 times £5, which is £188.15. With the daily rolling bet, you may have seen some slight adjustment to your account in the evening when the bet was rolled over, but you stand to gain most of this money.
For a losing example, assume the price went down to 168.92 – 169.90, and you closed the losing bet to prevent any further loss. The starting price was 194.99, as before, and the closing price was 168.92. That means you lost 26.07 points, and that works out to a loss of £130.35. Again your account may have been hit a little more because of the rollover charges.
Finally, you might consider using a stop loss order to save you feeling the need to check on the price all the time. With a stop loss order requiring your spread betting provider to close a losing bet at a certain level, you could have got out of this trade for example when the quote was 175.21 – 176.19. That means your starting price was 194.99 and your closing price 175.21 for a difference of 19.78 points, which would cost you £98.90.
Ladbrokes Quarterly Futures Style Bet
The current price for the far quarter spread bet on Ladbrokes is 194.32 – 196.66. Thinking there might be a bearish time coming, you decide to place a short or sell bet at 194.32 for £15 per point. Over the next few months, perhaps the price will fall as you expect, and you will be able to close your bet when the quote is 171.65 – 173.54.
To work out how much you have won, you simply have to calculate the difference in points and multiply by your stake.
- You opened your bet at 194.32
- You closed your bet at 173.54
- Therefore you made 194.32 minus 173.54 points
- This works out to 20.78 points
- Your stake was £15 per point
- Therefore this bet would win £311.70.
On the other hand, if the price went up after you placed your bet you might have to close for a loss. Say it went up to a level of 209.31 – 211.45.
- You opened your bet at 194.32
- You closed your bet at 211.45
- Therefore you lost 211.45 less 194.32
- This works out to 17.13 points
- Your stake was £15 per point
- Therefore this bet would lose £256.95.
It is important to note that, even with a futures style bet, you are not committed to hold onto the bet if you need to close it because it is losing. And if you do not want to be bothered with checking the prices every day, you might want to place a stop loss order to take you out of a losing situation. Perhaps a stop loss would close your trade for you when the price went up to 204.06 – 206.10.
- You opened your bet at 194.32
- Your spread betting provider closed your bet at 206.10
- Therefore you lost 206.10 less 194.32
- This works out to 11.78 points
- Your stake was £15 per point
- Therefore this bet would lose £176.70.