Capital and Counties Properties Fundamentals

Capital and Counties Properties, otherwise known as Capco, is a property investment and development company based in and operating in central London. It has only existed in this form for a couple of years, as it was part of Liberty International, a Real Estate Investment Trust (REIT) until 2010 when it was spun off. Companies that are involved with the property market are often good candidates for spread betting, with variable and volatile share pricing, and looking at the daily price chart below you can see that Capco is no exception.

Spread Betting on Capital & Counties Properties

It has shown steady if irregular progress since its inception in May 2010, and its owned estates are now valued at around £1.6 billion. The share price will reflect any changes in property values, as well as the revenues that can be achieved from the property. This means that the company generally will offer good long-term returns to the shareholders, particularly now that the property bubble has reset market valuations.

There are three major divisions in the company. Firstly, the Covent Garden estate; secondly, EC&O, a subsidiary which owns Earls Court & Olympia; and lastly 50% ownership with Great Portland Estates in Great Capital Partnership which invests in commercial property in Piccadilly. All of these are high-value high profile sites, representing quality investments for the shareholders.

It is likely that the share prices will be news driven.  For instance, the sharp uptrend on the right of the chart may have resulted from the granting of outline planning permission by the Royal Borough of Kensington and Chelsea for 7500 homes on 21 November. If you plan to spread bet on this company, you should keep an eye on such news, perhaps setting a Google Alert to bring you details as and when it is announced. As you can see, there are plenty of opportunities to profit with this company from share price movement.

Capital and Counties Properties Rolling Daily: How to Spread Bet on Capital and Counties Properties Shares?

Capco, as it is known, has shown steady growth and currently seems to be on an uptrend. The current price for a daily rolling spread bet is 236.71 – 237.99. If you decide to bet on a continuing uptrend, you could stake £5 per point at the buying price of 237.99.

Suppose that your bet works out, and the price goes up to new highs of 252.56 – 253.84. You might decide to close your bet and collect your winnings. Your bet would close at the selling price, the lower price, of 252.56. Calculating your profit, 252.56-237.99 is 14.57 points. With a wager of £5 per point your profit is £72.85.

If you are involved in financial trading, you should know that not all of your bets will work out, and you must be prepared to close a position if it looks like it will continue to lose for you. If the price went down to 225.25 – 226.53, you might choose to settle for the loss and end your bet. The opening price, as before, was 237.99; this time your closing price was 225.25. The difference between these, 12.74 points, is the amount you lost. Multiplying by £5 this works out to £63.70.

Unless you are trading full-time, and fully committed to your computer, you might want to use a stop loss order to protect you from excessive losses. Even if you do not know that the price has fallen, your spread betting provider will automatically close your bet for you when it reaches a level you choose. The actual price is not guaranteed unless you take out a Guaranteed Stop Loss (GSL), but you will usually finish near your selected number. With a stoploss order, your losing bet might have closed when the quote was 229.63 – 230.91. This time you would have lost 237.99 minus 229.63 points, or 8.36 points, and this would cost you £41.80.

Capital & Counties Properties Quarterly Futures Bet

With a futures style spread bet, you incur no account charges or maintenance withdrawals while the bet is open, although you pay for this benefit by the quote usually having a larger spread. The current quotation for a far quarter futures bet is 237.88 – 240.75. If you believe that the price is going up, you could place a long bet at 240.75, wagering perhaps £15 per point.

Assuming first that your bet is successful, you might find that you are able to close your trade and collect your winnings at a price of 263.71 – 266.25. As it is a long bet, it closes on the lower of the prices, 263.71. Taking 240.75 away from 263.71, you find that you have gained 22.96 points. For a stake of £15 per point, that amounts to a profit of £344.40.

But sometimes your bet will be unsuccessful, so imagine the price fell to 220.12 – 222.96, and you closed your trade for a loss to avoid any further drop. The starting price was 240.75 and the closing price was 220.12, a difference of 20.63 points. For your chosen stake, that amounts to a loss of £309.45.

Many spread betters and other traders make use of stop loss orders to control their accounts. Placed when you open the bet, a stop loss order will tell that your spread betting company to close a losing trade when it reaches a price that you set. This saves you watching the market continually. The stop loss order on this trade might have closed your position when the price was quoted at 225.73 – 228.37. The opening price was 240.75, as before. The closing price this time was 225.73. That means that you have lost 240.75 minus 225.73 points, which amounts to 15.02 points. For £15 per point, this would have cost you £225.30.