A trading opportunity for you?

Will RSA Insurance continue falling, or will it rise again back to 637p September highs?

• The price has fallen close to 6.7% in past week.
• Shares are down over 7.2% from 2018 highs, +7.2% from 2018 lows, -7.5% year-to-date.
• Shares have fallen after RSA Insurance reported disappointing Q3 results.
• International underwriting was strong, but UK business made a loss of ~£70m due to lower premiums.
• 9-month pre-tax profit was also lower due to higher weather costs (Source: Bloomberg, FT, Reuters).
• Shares have been as high as 646p in  September, and as low as 574p. It is now at 578p.
• Will the sell-off continue, or can the shares recover?

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Trading RSA Insurance – An Example

Let’s say you feel that the stock is a bargain and you think could bounce back towards September high of 646p. You decide to buy exposure to £10,000 worth of RSA Insurance using a CFD, at the current price of 578p. To do this, you need £2,000.

Let’s assume RSA Insurance recovers back to 646p (+6.5%). Your profit would be £650, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 4% from the current price. RSA Insurance falls 4% and hits your stop-loss. Your loss would be £400.

This is provided for information purposes only. It should not be taken as a recommendation.