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

Babcock is due to report results this Wednesday, 19th September

• The chart shows the price movements last time Babcock reported.
• Last time Babcock issued results in mid-July, the share price opened 78p lower.
• Shares fell after Babcock issued a revenue warning.
• Babcock will issue another trading update on Weds, 19 Sept
• Recent share price: 1 month lows were at 685.6p. 1 month high at 739.4p. Currently at 698.1p (at time of writing).

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Trading Babcock – An Example

Let’s say you think that Babcock results are likely to be good, and the price is likely to rise. You decide to buy exposure to £10,000 worth of Babcock using a CFD, at the current price of 698.1p. To do this, you need £2,000.

For the purpose of this example, let’s assume Babcock reports strong results and the share price rises by 10%. Your profit would be £1,000, 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. Babcock results miss, it 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.