Is this an opportunity to take a position ahead of the results?

Smiths Group reports results this Friday (21st Sept)

• The chart shows the price movement last time Smiths reported (18 July).
• The shares opened -100p before falling another 64p to lows of the day
• The shares then rebounded 42p to finish the day -122p.
• The reason for the share price drop was negative news about its Medical division.
• Smiths Group publishes FY results this Friday (21 Sept)
• Last week (13 Sept) Smiths confirmed it had been in discussions about a merger of its Medical business. Could we get more positive or negative news on this matter?
• Recent share price range: September lows 1,533p; September highs 1,658p. Currently 1,562p (at time of writing).

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Trading Smiths Group – An Example

Let’s say you think that Smiths Group results are likely to be good, and the share price is likely to rise. You decide to buy exposure to £10,000 worth of Smiths Group using CFDs, at the current price of 1,562p. To do this, you need £2,000.

For the purpose of this example, let’s assume Smiths Group 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. Smiths Group 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.