A range trading opportunity for you?
Will Rio Tinto break lower, or will it rise back again to 4800p?
- Rising range since November; Now trading 4481p (at time of writing)
- Will the pattern repeat itself, testing previous 4800p highs?
- Shares -6.4% from 2019 highs; +25% from 2019 lows; +20.2% year-to-date.
- Suspension of competitor Vale’s Brazil mine tightens iron ore market
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading Rio Tinto – An Example
Let’s say you like the range, you think it’s heading back towards 4800p again. You decide to buy exposure to £10,000 worth of Rio Tinto using a CFD, at the current price of 4481p. To do this, you need £2,000.
Let’s assume Rio Tinto rises back to 4800p (+7.1%). Your profit would be £710, 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. Rio Tinto falls 3% and hits your stop-loss. Your loss would be £300.
This is provided for information purposes only. It should not be taken as a recommendation.