Rotork (ROR) is a name that may not be known much outside the engineering field, but the company is a leading manufacturer of electric, pneumatic, and hydraulic valve actuators and control systems, and associated devices. For the spread betting enthusiast, the manufacturer of industrial valves and flow controls represents a stable growth pattern with minor retracements.
Looking at this monthly price chart for an overall picture on the company, you can see that in common with most if not all companies it had a dip in value during the global economic crisis, but it recovered strongly and is now trading at approximately twice its pre-crisis value.
The company started in the 1940s in Bristol as a small engineering workshop, and in 1945 was bought by Frenchay Products, producing a controls actuator in 1952. It was listed on the London Stock Exchange in 1968, under the name Rotork Controls. Controls have always been its strength, and the company has expanded by making several strategic acquisitions.
Today, Rotork is the global leading producer by volume of valve actuators which are used in safety equipment for oil and gas plants. It has a site services division which provides support for the three product divisions, covering electric valve actuation, fluid power valve actuators, and gearboxes for automatic and hand valves. It has a strong service network with representatives who give lifetime support for maintenance, repair, and upgrade. Rotork has representation in over 75 countries, and manufacturing facilities in the UK, the USA, Italy, Germany, Spain, Sweden, Norway, Holland, India, and China.
While the overall stock price growth is strong, looking at the daily price you will find volatility up and down, and some days when the trading range is nearly 100 points. This means that you should take care to protect your account against losses, with the understanding that however careful your analysis some bets will inevitably go in the opposite direction to that which you anticipate. Nonetheless, such activity presents many opportunities for profitable trading.
Rotork Rolling Daily: How to Spread Bet on Rotork shares?
For the spread better who is concerned about the shorter time frames, the rolling daily bet usually gives tight spreads and good value. The current quote for Rotork is 2275 – 2285. If you think that the price will go up, you might choose to place a long bet at 2285, staking perhaps £2.50 per point. Should the price increase, you may need to reapply your technical analysis of the chart to determine when you think it has reached a peak for the time being. In this example, that may be when it gets up to 2382 – 2392, approximately the level of the upper Bollinger Band.
Closing your trade at that time, you can figure out how much you have won. The closing price is 2382, up from an opening price of 2285. That means you have gained 97 points. Multiplying by your stake, your winnings work out to £242.50.
If instead the stock price goes the wrong way, perhaps breaking downwards out of the Bollinger Bands, you might decide to cut your losses when it reaches 2206 – 2216. The opening price was 2285, and the closing price would be 2206, for a loss of 79 points. This amounts to £197.50.
Many spread betters use a stop loss order to take care of their trades when they cannot be watching the market. The stoploss order will close a losing position once it reaches a level that you set, usually at the time you open the bet. If you had used one in this case, you might find that your spread betting provider closed the bet for you when it dropped to 2223 – 2233. This time from a starting price of 2285, your bet has dropped to a closing value of 2223, a fall of 62 points. For your chosen size of stake, this would be a loss of £155.
Rotork Quarterly Futures Spread Bet
The current quotation for a far quarter spread bet on Rotork, the engineering company, is 2288 – 2300. Thinking that a retracement is due, you might choose to place a short bet for £3.50 per point.
It might be that you see the price fall to 2196 – 2208, and you decide to close the bet and take your profit. Your sell bet was placed at the selling price of 2288, and it closed at the buying price of 2208, which means that your bet gained the difference, 80 points. Multiplying by £3.50, your winnings work out to £280.
But if the price rises after you place the bet, you might need to close the trade for a loss, simply to avoid losing any more. Perhaps the price went up to 2351 – 2363, and you decided that was far enough. Your bet opened at 2288, and it closed at 2363, a loss of 75 points. With a stake of £3.50, that amounts to a loss of £262.50.
Many traders decide to use a stop loss order to control their inevitable losses. The stop loss order instructs your spread betting provider to close your bet if the loss gets to a certain level. Note that it does not guarantee the price that you will close at, unless you pay for the special Guaranteed Stop Loss order by taking a larger spread. But you can expect usually to get around the price you set. In this case, a stoploss order might have closed the bet at 2339 – 2351, before you got around to seeing that the spread bet was losing.
The spread bet was opened at 2288, as before. Your bet closed at 2351. 2351 minus 2288 is 63 points. Multiplying by your wager of £3.50 per point, you would have lost £220.50.