Spread-betters take some retail therapy

THE announcements during the last week seemed to be dominated with news from the retail sector, with spread-betters being the first to trade the opportunities available.

Marks & Spencer

MARKS & Spencer delivered disappointing figures last week, causing the share price to 'gap' down from the 275p to the 265p area. This brought spread-betters out of the woodwork with many placing sell bets ahead of the downgrades and sell recommendations that came from many brokers.

As is often the case when a share price trades on the lows, we get bid speculation and the weekend provided such speculation of private equity buyers.

This speculation resulted in the share price 'gapping' back up to its current levels around 275p. Shrewd spread-betters will no doubt have guaranteed stop-loss orders in place to protect their short positions; especially in a stock which is prone to take-over!

Burberry

THE fashion retailer Burberry announced its second-half sales figures last week. The unexpected strong growth of some 13% was partly due to the success of its new 'coloured' range of products. The news was received very well as many believed that Burberry's traditional check designs would eventually 'run out of steam'.

This successful innovative thinking by the fashion retailer fuelled considerable activity in the June spread-bets, as spread-betters were good buyers during the second half of the week. They expected the good news to produce further gains towards the highs of 411, last seen in November of last year, with the share price closing on Friday at 377.

Many spread-betters trade using technical analysis and the Burberry share price has been trading in an uptrend during the last month, with support (buying) levels being at 365 and resistance (selling) levels existing at 395.

WH Smith

THE private equity firm, Permira, put a cash offer of £940m on the table for WH Smith equating to 375p for the shares. The shares were trading at about 255p on Friday and jumped almost 100p to current levels around 340p.

Spread-betters are keeping a close eye on this stock as volatility presents great opportunities. The advantage of spread-betting is that you can place 'guaranteed stop-loss' orders with most spread-betting firms, meaning that even if the stock price gaps up or down through your stop-loss level, you are guaranteed to be filled at the price specified.

With a potential bid on the table all spread-betters should keep these guaranteed stop-loss orders in place with every open position.