PRN: The Dangers and Rewards of Spread Betting on Bid Rumours
However, spread betting on bid rumours can be quite dangerous too, with share prices tending to be highly volatile both to the upside, when bid rumours emerge, and to the downside, should the rumoured parties quash the speculation by issuing denials.
The Dangers and Rewards of Spread Betting on Bid Rumours
LONDON, January 16, 2012 /PRNewswire/ --
Bid rumours could provide rewarding insights into the future movements of share prices for spread bettors. However, spread betting on bid rumours can be quite dangerous too, with share prices tending to be highly volatile both to the upside, when bid rumours emerge, and to the downside, should the rumoured parties quash the speculation by issuing denials.
Recently, fresh speculation of a takeover bid for Gulf Keystone Petroleum saw the Kurdistan focused oil and gas explorer's shares soar from 198.50p on the 8th January 2012 to a record high of 350p on the 12th January 2012. A rise of 76% in value in just four trading days based on rumours.
A report in The Telegraph also said that Gulf Keystone was forced to deny a report that US oil giant ExxonMobil had been preparing an 800p-a-share offer. The consensus of the article was that it would be a matter of time before Gulf Keystone would sell up. Gulf Keystone declined to comment.
Gulf Keystone Petroleum shares retraced from the 350p high on the 12th January 2012 to close on the same day at a price of 276.25p, as traders locked in their gains in case no definitive bid emerged.
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