Rightmove is a real estate portal on the Internet for several major UK property agents. Being involved in property, which has had its ups and downs in recent years, means that this stock has good volatility for those looking for spread betting prospects. The stock has been on the increase since 2009, recovering well from a low of about 150 to nearly 10 times that value. At the time of writing (December 2013) Rightmove has reached a market valuation of £2.4 billion on the backcloth of a fast-recovering UK property market. Here is the daily price chart: –
The company started as a joint venture between various estate agents in 2000. The companies included at that time were the Halifax, Countrywide, Connells, and Royal & Sun Alliance. It was first publicly listed in 2006, not very good timing for the real estate market in general. However, as noted above, it is now booming, providing easy access to properties from several agents.
One reason for its success is that the English real estate market can be agent exclusive, and unlike the markets in some other countries it is difficult to obtain a definitive list of all properties for sale in a certain area. By combining the offerings from various agents, Rightmove gives house hunters a way to see a greater selection of houses than from visiting any single agent.
Halifax teamed up with the Bank of Scotland in 2001 to become HBOS, and that company sold its stake in Rightmove in 2008. Despite that being a depressed period for property sales, since the beginning of 2009 the shares of RIghtmove have been in a strong uptrend.
From a trading perspective, you can see several long bodied candlesticks in the chart above, and many others have long “wicks”, showing a range of prices within each day. This is a good thing if you have developed a trading system that will limit your losses should the moves be in the wrong direction.
Rightmove Rolling Daily: How to Spread Bet on Rightmove Shares?
With good volatility, you may decide it is worth spread betting on the shares of Rightmove plc. The current price for a rolling daily bet is 1491.3 – 1499.7. You should take care to analyse the price chart and decide which way the price is likely to move. Say you think it is going up, you might choose to stake £2.50 per point at the buying price of 1499.7.
For the sake of example, assume that you are correct and that you are able to close your bet and collect your profit when the price reaches 1623.2 – 1631.6. To work out how much you have won, you simply figure out the number of points you gained and multiply it by your stake. The bet closed at the selling price of 1623.2, so taking away the opening price of 1499.7, you can see that you have gained 123.5 points. Multiplying by the stake, that works out to a profit of £308.75. As it is a rolling bet, you may have noticed an adjustment to your account each evening that the bet was held over, but usually this is not large.
Of course, this might have been a losing bet, with the price dropping to 1401.7 – 1410.1 before you closed the bet and accepted your loss. In this case the point difference would be 1499.7 minus 1401.7, which is 98.0 points. For your selected stake, this is a loss of £245.
It often helps to use a stop loss order to keep track of the price. Your spread betting provider will automatically close your trade if and when it reaches a certain level of loss. You might find that it had closed at 1425.2 – 1433.6 if you had used a stop loss order. This would mean that your loss would only be 1499.7 less 1425.2 points, which is 74.5 points, which amounts to £186.25.
Rightmove Quarterly Futures
Some traders prefer to use futures style spread bets to avoid any rollover charges. Despite the fact that they have a larger spread, they can work out cheaper if you expect to hold your bet open for more than a few weeks. The current price for the far quarter on Rightmove is 1495 – 1508. Say you are bullish on this stock, you could place a long bet for £1.50 per point.
Consider first that you are correct in being bullish, and that the stock price rises. You may choose to close your bet and collect your winnings when the quote is 1673 – 1685. Your bet was placed at the buying price of 1508, and it closed at the selling price of 1673, giving you a gain of 165 points. Multiplying this by £1.50, your total gain is £247.50.
If the price went down after you placed your long bet, then you are faced with a loss and will need to decide when to cut your losses and close the trade. Say you did this when the price dropped down to 1386 – 1398. The closing price would be 1386, down from the opening price of 1508. 1508 minus 1386 is 122 points, which for your size of wager works out to £183 lost.
As it is not always convenient to keep a check on the markets all the time, many spread betters prefer to use a stop loss order to take them out of a losing bet. The spread betting dealer will automatically close your trade when it reaches a price you set. With a stop loss order, this trade may have closed at 1415 – 1428. The opening price was 1508, as before, and this time the trade closed at 1415. This amounts to a loss of 93 points. Your total financial loss would be £139.50.