In contrast to many of the technology companies listed on the NASDAQ, Texas Instruments can trace its roots back many decades. If you are considering spread betting on Texas Instruments, then it is worth studying where it has come from to understand the philosophies. It is headquartered in Texas, specializing in semiconductors and computer technology. TI, as it is called, is the third-largest supplier of semiconductors worldwide.
TI came from a couple of other companies. Geophysical Service, dating back to the 1930s, for a short time became General Instruments, which was changed to Texas Instruments because another company was already called General Instrument. To get listed on the stock exchange, TI merged in 1953 with Intercontinental Rubber Company which was already listed. Thus, at the start, TI was listed on the New York Stock Exchange, although now it is on the NASDAQ where it belongs.
Through the years, Texas Instruments has dabbled in a number of fields, including digital clocks, home computers, and military defence. But now it is focused on two main areas, semiconductors and educational technology. Semiconductors account for most of TI’s business, and include digital signal processing and analogue semiconductors. Educational technology covers the well-known graphing calculators as part of its calculator range.
As you can see from the daily price chart shown above, TI is currently in a downtrend. As with most technology companies, you can expect a fair measure of volatility in its price movement, as you can see in the chart. Note particularly the length of the candlesticks, indicating the difference between the opening and closing prices on each day. From a spread betting perspective, as long as you are careful to protect your capital by not over committing on any bets, you will find that TI presents you with some opportunities for profit, going either short or long. Using technical analysis should provide you with higher probability trades.
Texas Instruments Rolling Daily
The current rolling daily price for Texas Instruments is 2741 – 2750. Just on this particular day, the price has changed nearly 90 points, which is an indication of a volatility that is not uncommon. Suppose you think that the stock is overvalued, and will be falling in price in the next few days, you could place a sell bet, shorting the stock, at a price of 2741. You might wager £3.50 per point.
If you are correct, you might find that the price drops to 2586 – 2595, and you decide to collect your winnings. Closing the short bet at 2595, the buying price, the number of points that you have gained is 2741 minus 2595, which is 146 points. Multiplying this by your stake you find that you have won £511.
On the other hand, the stock might have gone up after you placed your spread bet, and you would have to decide when to close your bet and accept your loss. Perhaps when you saw the price go up to 2865 – 2874 you would decide that was far enough, and end the trade. Your starting price was 2741, as before, and this time you close the trade when the price is 2874. The difference in these prices is 133 points, so your loss would be £465.50.
An alternative way of closing a losing bet is to establish a stoploss order when you open your trade. The stoploss order requires your spread betting provider to close your losing position when it reaches a price that you specify, so it can work more quickly than you checking your trade the next time you log in. With this perhaps the trade would have closed at 2823 – 2832. Your loss in this case would be 2832 minus 2741, which is 91 points. That would cost you £318.50.
Texas Instruments Futures Spread Bet
Taking a medium-term view of Texas Instruments, if you decide that the stock will be going up you could take a long position on the futures style spread bet. You usually have a choice of three futures periods, the near quarter, mid-quarter, and far quarter, and the current price for a far quarter spread bet is quoted as 2759 – 2793. You decide to stake £2 per point at the buying price of 2793.
As a first example, assume that the price goes up as you had wished, and you are able to close your bet and cash out when the quote is 3015 – 3042. Your bet has risen from the buying price of 2793 to the selling price of 3015, which means you have gained 222 points. As you wagered £2 per point, that amounts to a profit of £444. With a futures bet, you do not have any sundry charges to your account for rollovers, so this is all profit.
Secondly, perhaps you weren’t so lucky and the stock price went down after you had placed your bet. In this case you would try and cut your losses, closing your bet as soon as you realized it wasn’t going to work out. The price might have been 2586 – 2615 when you ended the trade. With a starting price of 2793 and a closing price of 2586, you have lost 207 points. That amounts to £414.
If you don’t have time to watch the market as often as you would wish, you could use a stop loss order to close a losing trade in a timely manner. If you had done this perhaps your bet would have been closed earlier, at a price of 2683 – 2709. Taking 2683 away from 2793, you would have lost 110 points. For your size of stake, that would be £220.