Apple Inc. is a multinational US Corporation known around the world, most particularly nowadays for its “i” products, such as iPod, iPhone, iPad, and iTunes. It was established in 1976 in California, and was called Apple Computer, Inc. for many years. The word “Computer” was lost in 2007 because of the increasing emphasis on other products. It has experienced exciting growth recently, despite the untimely death of founder Steve Jobs, and has presented many spread betting trading opportunities. Here is a recent weekly price chart: –
You can see that the price has doubled in just the last year and a half.
Though there were many cynics, saying that Apple’s success was over when Jobs died, they reckoned without the fact that many products take time to come to market, thus there is a backlog of several years of products in which he had a personal hand; and in any case the corporate culture continues after him. In fact, his death was announced on 5 October 2011, at about the middle of the chart, and was followed by three short red candles going down, and a longer bullish blue candle. With just a slight dip after this, the stock price has been rising significantly in the first part of 2012.
If you’re interested in spread betting on Apple Inc., then you will need to stay in touch with the technology announcements. Typically, when another model of the iPhone, for example, is announced, the market reacts. The reaction is prompted by the initial press coverage, either good, saying what new features are included; or bad, indicating that the upgrade is not as good as expected. Apple has always “marched to its own drum”, demanding premium prices for its products but delivering the goods, and generating a faithful following. If you are a technophobe, then you’ll probably enjoy keeping up, and this will illuminate your spread betting.
Apple Rolling Daily
The current quote for a rolling daily bet on Apple Inc. is 61,026 – 61,041. Because this price is so large, equivalent to about $610 per share, you may find that your spread betting provider allows you to bet a reduced amount. For example, with IG Index you can bet as little as 24 pence per point. Considering the volatility of the stock, even this can amount to a significant total on the bet.
Suppose you think that Apple is going to go up, you could place a long bet for 50 pence per point. If you are correct, you might find that the price goes up to 63,136 – 63,152. If you closed your bet to collect your winnings, your calculation would be -:
- starting price 61,041
- closing price 63,136
- gain equals 63,136 minus 61,041
- which is 2095 points
- multiplied by 50p stake
- gives a profit of £1047.50.
But there will be many times when the bet does not go in your direction, and you need to calculate how much you have lost. Perhaps the price dropped to 59,632 – 59,647, and you decided to close the bet and cut your losses. This time the calculation is -:
- starting price of 61,041
- closing price of 59,632
- loss equals 61,041 minus 59,632
- which is 1409 points
- multiplied by 50p stake
- gives a loss of £704.50.
Many traders suggest that you use a stop loss order with every spread bet, simply as it protects the amount of your loss if you’re not able to follow the market all the time. Perhaps if you had used one in this case the bet would have closed earlier when the quote was 60,123 – 60,139. With a closing price of 60,123, you would have lost 918 points which would have cost you £459.
Apple Futures Based
The current price for a far quarter future spread bet on Apple is 61,268 – 61,307. Given the size of these numbers, you must be careful not to over extend your account. If you think that the stock is due for a retracement and will go down in price, you may choose to wager the minimum 24p per point on a short bet.
Firstly, consider the case when your bet is a winner. Perhaps the price dropped to 58,622 – 58,660 and you closed your bet to collect your gains. Your sell bet was opened at the selling price of 61,268, and it closed at a price of 58,660, which is a gain of 2608 points to you. Multiplying by your stake, you have won £652.92.
You must also consider the case when your bet loses. At some point, you will need to close the bet and accept your loss, simply to prevent further loss. Perhaps you do this when the price goes up to 63,034 – 63,073. Your bet was still opened at the price of 61,268, but this time it closed at the buying price of 63,073. 63,073 minus 61,268 is 1805 points. At 24p per point, this is a loss of £433.20.
If you’re not going to stay glued to your computer screen, then you may consider placing a stoploss order when you open the bet. That way, your spread betting provider will close your losing trade for you when it reaches a level you set. With a stoploss order, you might find that the trade closed earlier, when the price was 62,469 – 62,508. Your short bet was opened at 61,268, and it closed at 62,508. The difference between these is 1240 points. As your stake was 24p per point, you would lose a total of £297.60 using a stoploss order.