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

WPP reports results on Thursday, 25 Oct

• The chart shows the price movement last time WPP reported: H1 Results, 4 Sep.
• Shares opened -56.5p (-4.4%), pulled slightly back to -45.5p (-3.6%, high of the day) and fell as low as -109.5p (-8.6%%).
• The shares closed -80p (-6.3%) for a daily range of 64p or 5%.
• WPP shares fell after company reported weak performance in key North American market.
• Company also lowered guidance for FY operating margin.
• On 8 Oct, WPP lost an important creative contract with client Ford to rival Omnicom.
• Recent share price range: Oct lows 1,015p; Oct highs 1,157p. Currently 1,047p (at time of writing).
• WPP publishes a Q3 Trading Statement on Thursday, 25 Oct
• Will we see another big move?

Click to enlarge

Trading WPP – An Example

Let’s say you think that WPP results are likely to be good, and the share price is likely to rise. You decide to buy exposure to £10,000 worth of WPP using CFDs, at the current price of 1,047p. To do this, you need £2,000.

For the purpose of this example, let’s assume WPP reports strong results and the shares rise 10%. Your profit would be £1,000, from your initial investment of £2,000.

Conversely, let’s assume you open the position, and place a stop-loss 5% below the current price. WPP results miss, it falls 5% and hits your stop-loss. Your loss would be £500.

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