Mitchells & Butlers is a descendent of the brewing company often known simply as M&B, and manages about 1600 pubs, bars, and restaurants in the UK. The daily price chart below gives some indication of recent volatility, which is important when you are looking for shares for spread betting. In this case, it looks as though the uptrend is continuing nicely after a short retracement, with the MACD giving a positive signal.
The company started off when Mitchells Brewery, founded in 1866, merged with Butler’s Brewery, also founded in 1866. The merger took place in 1898. The combined company merged with Bass in 1961, and the American company Coors Brewers closed down the brewing operation in 2002.
Out of this arose the current company, which manages a variety of well-known chains, such as the Toby Carvery, Harvester, etc. Many of its properties are up market, offering food as well as drink. Recent times have not been kind to Mitchells & Butlers, for example in 2008 there were significant losses because of hedge positions they had taken in anticipation of a property venture, which was cancelled because of the subprime mortgage crisis. From the previous high above 900, the shares went down to 130 before bouncing back up to between 200 and 300.
From a trading perspective, the company has been recovering in recent months, and can generally be seen to be on an uptrend, despite odd retracements such as that seen above in November 2012. It then becomes a matter of timing for your spread bets to be sure that you are on the right side of both the up and down moves. These will often be signalled by the MACD, as in the case above, which shows that these shares should be relatively consistent to trade. As with all shares, you can expect some of the moves to fail and to have some losses, but overall, profits should be attainable.
Mitchells and Butlers Rolling Daily: How to Spread Bet on Mitchells and Butlers Shares?
If you look at the daily price chart, you will see that it is reasonable to expect that Mitchells & Butlers is going to increase in value. Before you enter a bet, you should confirm this by looking at other indicators and examining historic information, but assuming you have performed your due diligence, you may want to place a long bet on these shares with a stake of £12 per point. The current rolling daily quotation is 324.79 – 326.41.
If all goes well and the price goes up, you may be able to close your bet and collect your winnings when the quote is 366.22 – 367.84. It is easy to work out how much you have won, which you do as follows: –
- Your bet was placed at 326.41
- Your bet closed at 366.22
- Therefore you gained 366.22 minus 326.41 points
- This works out to 39.81 points
- Your stake was £12 per point
- Therefore you have profited 39.81 times £12
- Your winnings are £477.72
If things did not turn out so well and the price fell, you might decide to cut your losses and close the trade when the quote was 299.93 – 301.55. Working out your loss: –
- Your bet was placed at 326.41
- Your bet closed at 299.93
- Therefore you lost 326.41 less 299.93 points
- This works out to 26.48 points
- Your stake was £12 per point
- Therefore you have lost 26.48 times £12
- Your loss is £317.76
You might have placed a stop loss order on this bet, to protect you from a fall in price while you are not watching the market. Assume the stop loss closed the bet at 312.36 – 313.98: –
- Your bet was placed at 326.41
- Your bet closed at 312.36
- Therefore you lost 326.41 less 312.36 points
- This works out to 14.05 points
- Your stake was £12 per point
- Therefore you have lost 14.05 times £12
- Your loss is £168.60
Mitchells and Butlers Futures Style Bet
Taking a longer view of the market, you might choose to place a futures style bet on Mitchells & Butlers. The current quote for a far quarter bet is 326.03 – 329.97. Say you think the price is going up, and place a long bet for £5 per point at the buying price of 329.97.
Over the next few weeks or months, you might see the price creep up until it reaches a level of 388.18 – 392.12, which you believe from your analysis is about as high as it is going to get. Closing the spread bet, you figure out how much you have gained. Your bet opened at the price of 329.97. You closed it at a price of 388.18. Taking 329.97 away from 388.18, you have gained 58.21 points. As your stake was £5 per point, this works out to a profit of £291.05.
Quite often your bet will not work out, and you must be sure to close it quickly to avoid losing too much. If the price dropped to 301.17 – 305.11 and you closed your futures bet, you can figure out how much this bet has cost you. The opening price was 329.97, and the closing price was 301.17. The difference between these is 28.80 points, so for a bet of £5 per point you would have lost £144.
Another way to close the bet quickly if it goes in the wrong direction is to place a stop loss order with your spread betting provider when you take out the original bet. This will close your trade whether or not you are watching the market, and so is very useful if you are not trading full-time. With a stop loss order you might find that the losing trade would close at 313.60 – 317.54. With an opening price of 329.97 and a closing price of 313.60, your point loss this time is 16.37. With the same £5 stake, this works out to £81.85.