SOCO International is in the oil and gas exploration and production business, and therefore should have plenty of volatility if you are interested in spread betting on it. In addition, as explained below, there have been various controversial issues which inevitably result in price impacts.
The company is headquartered in London and listed on the London Stock Exchange. It was founded in 1991 as a subsidiary of Snyder Oil Corporation of America. It entered the London Stock Exchange in 1997. Operating in Vietnam and the Democratic Republic of Congo, it has run into some political difficulties.
In 2010 the company received a Presidential decree from the DRC to explore for oil and gas in an area which included a national park which had been declared a World Heritage Site. It was alleged that the company had bribed the president to gain permission. When the employees forced their way into the park in 2011, the stock price fell.
This situation was cooled somewhat when the Environment Minister for the DRC declared in March 2011 that they would be performing their own governmental environmental assessment. However, in September the government went along with the authorization.
All this has resulted in a turbulent price structure and the weekly price chart shown above, although the daily chart is just as volatile. This is great news for anyone considering trading on the stock price, provided they can find reasonable analysis methods to be able to predict the moves the majority of the time. Looking at the weekly chart, there is a reasonable indication from the MACD of when the uptrends are happening, although it appears to lag a little further for downtrends. As the Moving Average Convergence Divergence is only one of the tools that you should be using for technical analysis, you should be seeing which of them can give you the most consistent trading predictions and result in the best profits.
SOCO International Rolling Daily: How to Spread Bet on SOCO International Shares?
SOCO is in the oil and gas field, which means it can be expected to have a volatile price. For an example of a rolling daily bet, consider that you might place a short bet for £12 per point on the daily rolling price, which currently is 357.80 – 360.00.
Firstly assume that your bet is a winner, and the price goes down to 332.80 – 335.00, at which time you close the bet and work out your profit. This is the calculation: –
- Your bet opened at the selling price, which was 357.80
- You closed your bet at 335.00
- Therefore your bet gained 357.80 minus 335.00 points
- 357.80 less 335.00 is 22.8 points
- You staked £12 per point
- Therefore you have made 22.8 x £12
- Your profit is £273.60
Some of the time you will have losing trades, and how you deal with them is important to your overall profitability. You need to be careful not to lose too much on those bets which are not working out. Suppose the price went up to 372.80 – 375.00. This time: –
- Your bet opened at the selling price, which was 357.80
- You closed your bet at 375.00
- Therefore your bet lost 375.00 minus 357.80 points
- 375.00 less 357.80 is 17.20 points
- You staked £12 per point
- Therefore you have lost 17.20 x £12
- Your total loss is £206.40
An alternative way to close a losing bet is to have the spread betting company do it for you, by placing a stop loss order when you take out the trade. With a stop loss, perhaps this position would have closed at 365.30 – 367.50.
- Your bet opened at the selling price, which was 357.80
- The bet was closed at 367.50
- Therefore your bet lost 367.50 minus 357.80 points
- 367.50 less 357.80 is 9.70 points
- You staked £12 per point
- Therefore you have lost 9.70 x £12
- Your total loss is £116.40
SOCO International Quarterly Futures
SOCO has had some controversial decisions taken concerning its exploration, so you can expect a turbulent price. Say you decide to go long on a futures bet, the current price for the far quarter is 359.11 – 363.85. You stake £10 per point, and your bet opens at 363.85, the buying price.
Perhaps the price goes up as you had hoped, and you decide to close your bet and collect your winnings when the quote goes to 396.61 – 401.35. That means that your bet closes at 396.61. Working out your profit, 396.61 minus 363.85 is 32.76 points. You chose to stake £10 per point, which means your winnings are simply calculated as £327.60.
Of course, the financial markets are not easily predictable, so you will have a share of losses. It is important to keep your losses as small as possible so that you profit overall. Say the price went down to 344.11 – 348.85. You close your bet and count your losses. This time it is 363.85 less 344.11, which is 19.74 points. So your loss this time is £197.40.
One way in which you can keep your losses down, particularly if you do not have time to keep watching the markets, is to place a stop loss order on your bet when you take it out. This instructs your spread betting provider to close your bet once it reaches a price level that you set in advance. In this case a stop loss order might have closed your bet earlier, when the price was 351.61 – 356.35. If you hadn’t been watching the market, you might have missed the price dropped into this level, and risked losing more. As it is, you have lost 363.85 minus 351.61 points, which is 12.24 points and amounts to a loss of £122.40.