Imagination Technologies Group Fundamentals

Imagination Technologies Group is a UK company which specializes in mobile graphics and chip technology. It is at the cutting edge of the electronics market, and you can see from the weekly price chart below that there has been a lot of activity, providing ample opportunities for spread betting profits.

Spread Betting on Imagination Technologies

The company started in 1985, when it was called VideoLogic. Its speciality at the time was graphics and video conferencing. It went on to the London Stock Exchange in 1994, and began its licensing history with NEC on the following year. The company worked out its direction, and refocused on the licensing market in 1999, which is when it changed its name to Imagination Technologies.

There followed a succession of acquisitions, and of licensing deals including Intel and Apple. These large companies also took up minor positions in Imagination Technologies shares. The weekly price chart above gives a clearer picture of the company’s progress recently than the daily chart, which simply shows a general slump since September 2012.

You can see there have been many ups and downs, and not much sideways or range trading, which means there have been good opportunities to make or lose with spread betting. As always, the trick is to be on the right side of the trend. In this case, the trends have tended to last for some time, with an uptrend from August 2011 to May 2012, followed by a downtrend until July 2012, an uptrend into September 2012, and the final downtrend.

The fact that trends last for a while means that there has been a reasonable chance of being able to trade with the trend in the past, and collect a good profit. Of course, there is no guarantee that the company’s shares will continue to trade in this manner, but if they do it will prove easier for the spread better or share trader to make a profit.

Imagination Technologies Rolling Daily: How to Spread Bet on Imagination Technologies Shares?

Imagine that you expect the shares in Imagination Technologies Group to go up in value. The current price for a daily rolling spread bet is 407.58 – 409.62. Bearing in mind your account size and the current price, you decide to stake £15 per point on a long bet.

Imagine that the price goes up to 445.58 – 447.62. Your bet opened at the buying price of 409.62, and it closes at the selling price of 445.58. That means you have gained 445.58 minus 409.62 points. This works out to 35.96 points. With a stake of £15 per point, your total profit would be £539.40.

Imagine now that you were not so lucky, and that the price went down after you placed your long spreadbet. Perhaps the price went down to 384.78 – 386.82 before you decided to close the bet and accept your loss. The opening price was 409.62, as before. This time the closing price was 384.78. You have lost 309.62 less 384.78 points, which is 24.84 points. Multiplying by £15 per point, your losses amount to £372.60.

As this was a rolling daily bet, you may find that there have been slight adjustments to your account each evening when the bet is automatically rolled over by your spread betting provider. Provided your bet is only open for at most a few weeks, you should not find that these adjustments are very significant – your gain or loss on the price, particularly with this volatile stock, is likely to be far greater.

If you had decided to place a stop loss order on this bet, to help protect you from big losses, you might find that the trade was closed for you when the price is 396.18 – 398.22. Taking the closing price of 396.18 away from the opening price of 409.62, you find that this time you have lost 13.44 points. With a wager of £15 per point, this amounts to a loss of £201.

Imagination Technologies Group Quarterly Futures Style Bet

The futures style of bet is suitable when you think you may hang on to a bet for a few weeks or months, and you do not want to be paying rollover charges each evening. The futures bet will stay open until the expiration date with no financial implication. The current price for a far quarter bet on Imagination Technologies is 409.11 – 414.05. If you have a bearish view in the long run, then you might want to place a sell bet on this stock, which would go on at the selling price of 409.11. Say you decide to stake £12 per point.

If you are correct, you could close the bet for a profit if the price went down to 352.11 – 357.05. As this is a short spreadbet, it closes at the buying price, in this case 357.05. That means you have made 409.11 minus 357.05 points, which works out to 52.06 points. Multiplying by your stake of £12 per point, you would have won £624.72.

But if the bet does not work out, the price could go up to 431.91 – 436.85 before you close it and accept your loss. Now you must take away 409.11 from 436.85 to find that you have lost 27.74 points. 27.74 times £12 amounts to £332.88 that this bet has cost you.

With a stop loss order, you might save some of this loss. You would place the stop loss order when you open to the bet, and specify the losing price at which you wanted your spread betting company to close the trade and cut your losses. Say the stop loss would close the trade at 420.51 – 425.45. The closing price would be 425.45. With an opening price of 409.11, that means you have lost 16.34 points. Now with your stake of £12 per point, your total loss is £196.08.