Does this present a Takeover opportunity for you?
Will anything come of this speculation? Could Lloyds shares benefit?
- The chart shows Lloyds’ share price movements over the past 3 years
- There are media reports today that Lloyds could be a takeover target for UniCredit
- According to speculation in Italian newspaper “Il Sole” (verbatim from Google translate), “‘archived attempts to aggregate with Commerzbank, and temporarily suspended those with Société Générale’, UniCredit would be considering for its merger plan in 2019 the English Lloyds Bank, ABN Amro and ING.”
- Will this speculation prove much ado about nothing, or could a deal emerge?
- If speculation intensifies could it drive Lloyds shares higher?
Trading Lloyds – An Example
Let’s say you think that Lloyds is likely to rise further in anticipation of a takeover offer. You decide to buy exposure to £10,000 worth of Lloyds using a CFD, at the current price of 60.85p. To do this, you need £2,000.
For the purpose of this example, let’s assume the Lloyds share price rises by 10%. Your profit would be £1000, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 3% from the current price. Speculation quietens and Lloyds shares fall 3% and hit your stop-loss. Your loss would be £300.
This is provided for information purposes only. It should not be taken as a recommendation.