Stagecoach Group is an international transportation company that was founded in 1980, and operates in the United Kingdom and in North America. You can see from the daily price chart below that there are spread betting opportunities in both the long and short directions.
The group is based out of Scotland, and is the second largest transport group in the UK, just behind FirstGroup. It has 25% of the rail market, and 1/6 of the bus market, and carries about two and half million passengers each day.
In North America, Stagecoach works through Coach USA and Coach Canada brands. It started expanding when the coach market in Britain was deregulated in the early 80s, although the founders used to operate a minivan and motorcoach rental business for a few years prior to this. The competition was well known, with the state owned National Express and Scottish Citylink, but the company expanded aggressively in the 80s including acquisition of existing carriers. However, in 1988 the company sold off its long-distance express coach market to National Express.
Various opportunities came the way of Stagecoach. For instance, they were heavily involved after British Rail’s privatization, and bought about a third of the railway units in the form of a company called Porterbrook. This was sold on to Abbey National in 2000. Another departure from its previous history was the purchase of Scotland’s Prestwick Airport in 1998, again sold on this time in 2001 for a large profit.
Stagecoach has moved away from inner-city bus routes, particularly since one of its buses was lost in the 7th July 2005 bombings. It concentrates more on long-distance routes and is heavily involved in the railway network. You can see from the daily price chart above that it has volatile pricing, but is currently looking in very good shape.
Stagecoach Group Rolling Daily: How to Spread Bet on Stagecoach Group Shares?
If you think that the Stagecoach Group’s performance will continue to go up, then you may be tempted to place a long or buy bet on its shares. The current daily rolling price for these is 301.64 – 303.16. The rolling daily bet is rolled over each evening automatically by your broker, who may make a small charge each time, but provided that you do not intend holding the bet open for more than a couple of weeks, it is probably the best type of bet to use.
Say you placed a bet for £25 per point. If the market does go up, you may be able to close your bet and collect your profits when the price is quoted at 335.23 – 336.72. As it was a long or buy bet, it went on at the buying price of 303.16, and closed at the selling price of 335.23. That means you made a profit of 335.23 minus 303.16 points, which is 32.07 points. With a stake of £25 per point, that amounts to a profit of £801.75.
Sometimes it can go the other way. After you placed your long bet perhaps it might go down, and you would have to close the bet for a loss before it fell too far. Perhaps you would close the bet when the price was quoted at 277.32 – 278.68. This time the closing price would be 277.32, again with an opening price of 303.16. The point difference is 25.84, which would amount to a loss of £646 on this particular bet.
The other way to get out of a losing bet, which can sometimes work out better, is to place a stop loss order at the same time that you open your main bet. This tells your spread betting provider to close your trade if it reaches a certain level of loss, and you do not have to watch the market yourself. In this case, it might have closed the trade when the price was 286.92 – 288.31. With a starting price of 303.16, and a closing price of 286.92, you would have lost 16.24 points, which would be £406.
Stagecoach Group Futures Bet
Stagecoach Group has offered plenty to interest the spread better in the last few years. If you want to take a longer-term view on a spread bet, you might choose to use a quarterly futures style bet, and the current quotation for the far quarter is 299.73 – 303.35. Let us say that with a bearish view of the outlook you decide to place a sell bet for £15 per point.
Perhaps over the course of the next couple of months the price steadily goes down, until it reaches a level of 263.51 – 266.92, at which point you decide to close your bet and cash in. The bet was placed at the selling price of 299.73, and it closes at the buying price of 266.92, which means you have gained 32.81 points. Multiplying by your stake of £15 per point, this amounts to a gain of £492.15.
Even though this is a futures style bet, and does not expire for seven months, you can close the bet at any time if you want or need to. For example, if the price started going up as soon as you placed the bet you might choose to end the trade and cut your losses when the price reached 321.67 – 325.02. The trade would be closed at the buying price of 325.02. That means you have lost 325.02 minus 299.73 points, which works out to 25.29 points. For your chosen stake, this would cost you £379.35.
Many traders decide that they do not have time to watch the market continuously, particularly on a longer bet. So they use a stop loss order to automatically close a trade which has gone against them. In this case a stop loss order might have closed the trade when the quote went up to 313.21 – 316.89. With a closing price of 316.89 on this short bet, and an opening price of 299.73, your loss this time is 17.16 points, for a loss of £257.40.