A range trading opportunity for you?

Will BP break lower, or will it rise back again to 602p?

• BP’s range has developed since late September
• Bounced off 575p zone 6 times in last few days. Now trading 580.5p (at time of writing)
• Will the pattern repeat itself, testing previous highs?
• Shares -4.0% from 2018 highs; +28.0% from 2018 lows; +11.2% year-to-date
• Oil companies benefiting from high oil prices
• 8 Oct: Eni, BP and Libya’s NOC to resume Libyan exploration
• BP (27 Sept) gets approval to develop Vorlich Field in North Sea, expecting to produce 20K barrels of oil equivalent (BOE)/day at peak, aiming for it to be onstream 2020; targeting total North Sea development of 30m BOE/day.
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading BP – An Example

Let’s say you like the range, you think it’s heading back towards 602p again. You decide to buy exposure to £10,000 worth of BP using a CFD, at the current price of 580p. To do this, you need £2,000.

Let’s assume BP rises back to 602p (+3.8%). Your profit would be £380, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 2% from the current price. BP falls 2% and hits your stop-loss. Your loss would be £200.

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