Comcast is a cable company, providing television, Internet, and telephone services to 40 states in the United States. You can see from the weekly chart below that it has moderate volatility making it suitable for spread betting, and that it is on a general growth pattern with periodic retracements.
From a fundamental point of view, Comcast has been behaving strongly, with dividend growth and price growth over the past five years. It appears to be fairly valued. However, Comcast has not always had the best of reputations for its service, and in 2010 it achieved the dubious distinction of being called the Consumerist 2010 Worst Company in America. In 2010 it also introduced a new branding called Xfinity, the name representing the infinite number of choices available to the consumer, and although some said that this was to sidestep the reputation of the “Comcast” name, it would appear to have failed in this regard, with Xfinity also having image problems.
One advantage that cable TV providers have over, for instance, satellite providers is that they have a hardwired captive audience. Cable companies have a virtual monopoly for their type of service, and satellite providers have to compete with each other and have issues with weather problems affecting signals. Satellite companies have also tried and failed to compete successfully with broadband Internet.
Comcast also has other divisions, for instance owning cable TV channels such as E!, Style Network, and G4. There are 18 million Comcast Internet users, and 9 million Comcast residential telephone lines. Subject to any unexpected major service shifts, you should be able to spread bet on the share price of Comcast in a traditional manner, analyzing the technicals to determine the strength of sentiment for a move in either direction, and placing your spread trades to maximize your probable outcomes.
Comcast Corporation Rolling Daily
Comcast Corporation is a large cable TV, Internet, and telephone service provider which is quoted on the NASDAQ stock exchange. The current pricing for a rolling daily bet is 3230 – 3236. Say you analyzed the price chart and decided that it was going to go up, you might place a long bet for £3 per point.
If you’re right, and the price goes up to 3438 – 3444, then you could close the bet and collect your winnings. As a long bet, the starting price was the higher or buying price of 3236. The closing price would be the lower selling price of 3438. The difference between these prices is your profit, which is 202 points. With a stake of £3 per point, your gain is £606. Set against this, as it is a rolling daily bet, may be a small charge each evening when the bet is rolled over. This usually does not amount to much compared to your actual gain or loss.
However carefully you analyze the chart, the best you can do is put the statistical odds in your favour. So you should not be surprised that some of your spread bets will lose. Say in this case the price fell to 3086 – 3094, and you decided to accept your loss and close the bet. The starting price was 3236, as before. This time it closed at 3086, a loss of 150 points. Because you staked £3 per point that means you lost £450.
To keep some control on their losses, many spread betters use a stop loss order. This means your spread betting provider will close a losing bet at a certain level for you, without you needing to instruct him further. Say the price dropped to 3149 – 3155 when the stoploss order triggered, your loss would be 3236 minus 3149, or 87 points. That would cost you £261.
Comcast Corporation Futures Style Bet
With a futures bet, you pay slightly more with an increased spread between the buying and selling prices, but you do not have rollover fees applied to your account each night. The current price for Comcast future spread bet, based on the far quarter, is 3233 – 3266. You can hold this one for eight months before the expiry date arrives.
If you think that Comcast is due for a retracement in its generally upward trend, you might choose to place a short or sell bet, staking perhaps £1.50 per point. In a few weeks or months, if the price goes down to 3036 – 3069, then you could close your bet and take your winnings. Your short bet opened at the lower or selling price of 3233, and closed at the buying price of 3069. 3233 less 3069 is 164 points, so for your chosen stake you have won £246.
Many times the price will not go in the direction that you expect, so you must also be prepared to close your bet for a loss, simply to avoid it going further into the red. Perhaps the price went up to 3350 – 3382, and you decided to cut your losses and end the trade. Your starting price was 3233, and the closing price was 3382, a difference of 149 points. In this case you would have lost £223.50.
One of the tools of the spread trader is the stop loss order. This requires your spread betting provider to close a losing bet at a preset price, whether or not you’re watching the markets. Note that unless you pay extra in the spread for a guaranteed stop loss, the actual price the trade closes at is not certain. If you had a stoploss order on this bet, you might find that you were taken out of the trade at 3306 – 3338. With a closing price of 3338 and an opening price of 3233 in this case you have lost 105 points, which would cost you £157.50 for your size of wager.