Qualcomm is a major telecommunications equipment manufacturer which operates worldwide. In the technology sector, you can see that its price has been volatile and suitable for spread betting. The named Qualcomm comes from the founders’ original intent to build “quality communications”. The company boasts a large number of patents to do with cell phone technology, and patent licensing to other manufacturers is part of its business.
The company is headquartered in California, where it has been since it was founded in 1985, and it went public in 1991. Entering the market through digital radio products, by 1990 Qualcomm was designing the first CDMA-based cellular station. The Industry Association had just standardized on TDMA (Time Division Multiple Access), but Qualcomm’s CDMA (Code Division Multiple Access) was superior in every way, and was by 1993 adopted as the standard for the industry.
The company has long since ceased to produce cellular base stations and to manufacture cell phones, and concentrates chiefly on producing satellite phones, push-to-talk technology, and semiconductors for mobile phones which are sold to many manufacturers.
You can see from the monthly price chart that the stock price has been volatile, but not experienced much overall growth over the past decade. This serves to indicate the competitive nature of the business that Qualcomm is in. There have been periods of steady growth followed by dramatic retracements, and although the 20 period moving average shows an uptrend in the last year, the future of the company’s share price is not clear-cut. The Bollinger bands appear to be squeezing down on this time scale, which generally indicates that you can expect a breakout either up or down in the next few months. The level of the MACD would seem to indicate an overbought situation, but gives no clear signals yet.
Qualcomm Rolling Daily
Qualcomm is a major company in the mobile communications market, developing products for many manufacturers. The current quote for a rolling daily bet is 5817 – 5826. If you think the price is going up, you could place a long bet at 5826, and you may choose to wager £6 per point.
This is a volatile stock, and if it works out you might find you are able to close your bet and collect your profit when the price goes up to 6159 – 6168. Your long bet would close on the selling price of 6159. Taking 5826 away from 6159 you work out that you have made 333 points on the bet. For your stake of £6 per point, that amounts to £1998.
On the other hand, the price may go down, and you may have to accept your loss and close the bet when the quote is 5597 – 5606. With a starting price of 5826 and a closing price of 5597, you would have lost 229 points, which would cost you £1374.
In addition to this, as a rolling daily bet you may find your account is charged each night when the bet is held open and rolled over. Usually this is not a significant amount, provided you don’t hold onto the bet for weeks or months.
What many spread betters do is open a stoploss order when they make a bet. This is a precaution, and is only needed if the bet becomes a loser. However, it can close your bet for you more quickly than if you chose to monitor the price yourself. In the case above, perhaps a stoploss order would have closed the bet for you at a price of 5736 – 5745. Your opening price was 5826, and the bet closed at 5736 for a loss of 90 points. For your chosen stake, this would cost you £540.
Qualcomm Futures Bet
To take a longer-term trade on Qualcomm, you may choose a futures style bet. The current price for the far quarter futures spread bet is 5814 – 5848. If you think that the share price is overvalued and due for a correction, you would place a short bet at the selling price of 5814, wagering perhaps £3 per point.
In a perfect world, all bets would win and the price may drop to 5532 – 5560. Closing your bet to collect your winnings, you can calculate that your starting price was 5814 and your closing price was 5560, giving you a gain of 254 points. With a stake of £3 per point, you have won £762.
But as we live in an imperfect world, your bet can also lose. Successful traders do not win all the time, but they try on average to win more than they lose. If the price went up to 5987 – 6015, you could close the trade to cut your losses and figure out how much the bet cost you. The starting price was 5814 and you closed at 6015, which means you lost 201 points. Therefore this loss cost you £603.
One of the tools of the spread better is the stop loss order. This requires your spread betting provider to close a losing trade for you if the price goes to a level that you set. As it happens straight away, there is no delay such as there might be if you were checking the prices manually, so it can save you some money. In this case, it might have closed the trade for you at 5903 – 5931. Your loss in this case is 5931 minus 5814, which is 117 points. Multiplying by your chosen stake, the cost to you is £351.