Nvidia Corporation is a California-based high-tech company which is best known for its graphics technologies. Its pricing is volatile, typical of high-tech companies, which makes it an exciting prospect for spread betting. It was founded in 1993, and went public in 1999, in the same year starting its GeForce range of graphics processing units (GPU’s) which is perhaps its most famous product.
This daily chart shows how the price has progressed recently, and the volatility is evident. Nvidia produced the graphics technology for the original Microsoft Xbox range, and has been involved in many similar projects since that time. It has stayed a leader in the market, providing about one third of all graphics devices, even though there have been issues legally which were only finalized in 2011, with an agreement with Intel for crosslicensing.
As Nvidia’s GPU’s are used in many different applications, it has the technology and the range of goods to stay up with the market, which includes mobile computing for phones and tablets, and special effects for movies. To this end, it has been aggressively acquiring other companies in recent years. The fact that the chart is tending downwards is a reflection of the competitiveness in this market sector.
Of particular interest to the spread better, you should note that the price chart reflects pricing which has “gap opens”, that is the price on the following day is gapped away from the previous pricing, and never trades at that rate. This can be awkward if you have a stoploss at a certain level, but the price jumps straight over it, causing your position to be closed a long way from the intended price. One way around this which you can consider is to use a “guaranteed stop loss” (GSL) where your spread betting provider will guarantee the price at which a losing bet can be closed, in return for charging you a larger spread.
Nvidia Corporation Rolling Daily
If you are considering spread betting on Nvidia, you need to study the charts and appreciate that the price is volatile. While this is an advantage if you are on the winning side, it also means that you have to protect your capital should you lose, and take care not to over commit your position. The current price for a rolling daily bet on Nvidia is 1308.7 – 1312.3.
If you think that Nvidia is going down, you could place a sell bet, a short position, staking perhaps £3 per point. Suppose that you are correct, you might find that you can close your bet when the quote reaches 1152.5 – 1156.0. To work out how much you have won, first you must calculate how many points you gained on your short bet. The position opened at 1308.7, and you closed it at 1156.0. The difference between these numbers is 152.7 points. You staked £3 per point, which means you have gained £458.10.
No matter how well you choose your bet, you should know that you can easily be on the losing side. Suppose the price goes up to 1415.2 – 1418.7, and you decide that you must close the bet to contain your losses. Once again, you opened at 1308.7, but this time the bet closed at the higher price of 1418.7, a gain of 110.0 points which is a loss to you as you bet that the price would go down. You have lost 110 times £3, or £330.
You should also consider using a stoploss order on your spread trades, as this means that a losing bet will be closed by your provider without you taking further action. Say the stop loss closed your trade when the price was 1376.2 – 1379.7. This time you have lost 1379.7 minus 1308.7, which is 71 points, and that would cost you £213.
Nvidia Corporation Futures Based Bet
Nvidia is one of the leading graphics processing and mobile computing chipset suppliers. The current price for a far quarter futures style spread bet is 1313.6 – 1330.5. Suppose you believe that the price will rise in the next few weeks or months, you might place a futures bet for £4 per point at the buying price of 1330.5.
If you are correct, and the price goes up to 1493.6 – 1509.3, then you could close your bet and collect your winnings. To work it out, you note that your long bet was placed at 1330.5 and closed at 1493.6. Taking one away from the other, you have gained 163.1 points. For your chosen stake, your winnings are £652.40.
On the other hand, the price might have gone down after you placed your bet, and you might reach a point at which you wanted to exit your bet, as you didn’t want to add to your losses. Perhaps you would decide to do this when the price went down to 1193.9 – 1208.6. Figuring out what you have lost, you close your bet at 1193.9, down from 1330.5. That is a loss of 136.6 points which at £4 per point works out to £546.40.
You will find that many spread traders recommend using a stoploss order to exit a losing trade. You place this order when you open the bet, and it requires your spread betting provider to close your position for a loss if the price goes down by a certain amount. If you had one of these, you might find that the position would be closed for you when it reached 1257.2 – 1271.3. To work out your loss now, take 1257.2 away from 1330.5 to get 73.3 points. Multiplying by your stake of £4 per point, your total loss works out to £293.20.