Free Guide to Spread Betting Renishaw Plc Shares Following Q3 Results

LONDON, May 16, 2012 /PRNewswire/ --

Use our free guide to find out how you can spread bet shares of Gloucestershire-based engineering company Renishaw PLC, following the announcement of their third quarter results.

Renishaw Share Price Climbs 11%

Leading the gains on the London Stock Exchange this morning (15 May), Renishaw PLC climbed 11.86% by 9:44 BST.

This boost followed the release of the firm's third quarter results for the period ending 31 March 2012; showing a revenue for the first 13 weeks of the year to be £81.6 million - 4% up on the £78.4 million generated over the same period in 2011.

You can read more spread betting articles through City Index.

How to Spread Bet the Renishaw DFT

For those investors looking to spread bet shares - they can do so with City Index through their professional trading platform which is available both online and on your mobile.

With a City Index spread betting account, you can take a position on the future price movement of over 12,000 financial instruments, including shares such as Renishaw PLC.

The City Index Renishaw DFT represents the underlying instrument (Renishaw PLC) and offers you a spread price that's derived from the price of the underlying instrument.

For example, as the market opened this morning - let us say that the City Index Renishaw DFT was available at a spread of 1380/1388. This is the sell and buy price.

Going Long on the Renishaw DFT

As the share price of Renishaw Plc rose this morning, investors decided to go long and buy shares on the Renishaw DFT market through City Index.

They did this because they expected that market to rise higher. Therefore, if you go long and buy with spread betting - you can net a tax-free* profit for each point rise in an instrument's price, for example Renishaw shares in this case. However, you will also net a loss for each point fall in that price.

As an example, say you decided to go long and buy at 1388 for a stake of £10 per point. This means that for every point the underlying instrument's share price rose, you would net a tax-free* profit of £10. As mentioned above - if it went against your position and fell, you would net a loss of £10 per point.

Let us say that having watched the market rise for an hour; you decide you want to close your trade.

The market is now available at a spread of 1527/1535 - it's sell and buy price.

In order to cash in your profits, you sell back your shares at 1527.

As a result, you net a tax-free profit of £1390, i.e. (1527-1388) x £10 = £1390.

Understand Leverage & Risk

It is imperative that you understand the risks involved before you start spread betting.

As a leveraged product, spread betting means you control a much larger position than your deposit would normally allow you to trade in the underlying market.

The advantage of this is that your winning trades can return much greater profits. However, the main risk is that your losses can be magnified in exactly the same way as your profits can be.

This means that risk management should play a crucial role in your trading strategy. 

Using the example above, let us consider what happens when the market moves against your position.

So, you have gone long on the Renishaw DFT for a £10 stake.

However, the market moves against you and begins to fall. You decide to cash in your profits to avoid further loss.

The market is now available at a spread of 1249/1257.

You sell back at 1249 - representing a 139 point decline and a £1390 loss, i.e. (1388-1249) x £10

You can read more spread betting articles like this through City Index.

*Spread betting is exempt from UK stamp duty and Capital Gains Tax. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting with City Index.

We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk/ for details.