Tesco
Is this an opportunity to take a position ahead of the results?
Tesco reports results next Wednesday, 3rd October
- The chart shows the price movement last time Tesco reported (15 June).
- The shares opened +1.1p (+0.4%), traded as high as +10.9p (+4.4%)
- They fell as low as +0.9p (+0.4%) and closed +5p (+2.0%), for a daily trading range of 10p or 4.0%.
- The reason for the 15 June share price rise was solid Q1 results and a positive outlook.
- This week Tesco launched its new discount store Jack’s, to fight competition from Aldi and Lidl
- Shares -26.3% from 2018 highs, +0.7% from 2018 lows, -7.4% YTD.
- Recent share price range: Sept lows 232p; Late-Aug highs 260p. Currently 240.7p (at time of writing).
- Tesco issues H1 Results on Wednesday (3 Oct). Will we see another big move?
Trading Tesco – An Example
Let’s say you think that Tesco results are likely to be good, and the share price is likely to rise. You decide to buy exposure to £10,000 worth of Tesco using CFDs, at the current price of 240.7p. To do this, you need £2,000.
For the purpose of this example, let’s assume Tesco reports strong results and the shares rise 5%. Your profit would be £500, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss 3% below the current price. Tesco results miss, it 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.