Will Direct Line Insurance continue falling, or will it recover today’s 22.3p/6.1% dividend?

• Direct Line Insurance shares down as much as 25p/7.1%
• It paid a 22.3p/6.1% dividend and now trades 341p (at time of writing)
• Shares -7% from 2019 highs; +9.5% from 2019 lows; +7% year-to-date.
• Can the stock recover yesterday’s 366p highs?
• 26 Mar: Direct Line to gain from opening up to price-comparison sites: Peel Hunt
• Source: Dow Jones, Bloomberg, FT, Company News, AlphaTerminal

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Trading Direct Line – An Example

Let’s say you feel that the stock is a bargain and you think could bounce back towards 366p highs. You decide to buy exposure to £10,000 worth of Direct Line  using a CFD, at the current price of 340p. To do this, you need £2,000.

Let’s assume Direct Line recovers back to 366p highs (+7.6%). Your profit would be £760, 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. Direct Line 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.