Will takeover talks with PT Medco Energi lead to a bid for Ophir Energy?

• The chart shows the Ophir Energy share price movements since September 2015.
• 2 Jan: Ophir Energy says in talks over possible takeover by Medco Energi
• 2 Jan: Jefferies says sector M&A activity unsurprising; suggests a bid in-line with net asset value = 52p/share
• Shares have jumped 29% trade 46p (at time of writing)
• Will Medco Energi make an offer or will it walk away?
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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Trading Ophir Energy – An Example

Let’s say you think that Ophir is likely to rise further as a result of a firm takeover offer. You decide to buy exposure to £10,000 worth of Ophir using a CFD, at the current price of 46p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Ophir share price rises by 10%. Your profit would be £1000, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Sentiment towards the deal sours and Ophir shares fall 5% and hit your stop-loss. Your loss would be £500.

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