Although in most areas there is a fierce battle over whether the EU is a good thing or not, in at least one particular space, the ESMA rules regarding spreadbetting and retail “gamblers” has to be regarded as something the City of London really did not need. Not that anyone would dare say this openly. As far as today’s update from Plus500 is concerned, the obvious effect of halved profits would appear to be an obvious knock on effect of last August’s new trading rules. But what is interesting is the way the group appears to have bounced back, adding 19% more customers during 2019. This is clearly impressive and suggests that the company is able to offer more than some of its competitors.
Nevertheless, unless volatility in the markets rises – which going into Brexit / Trade War escalation it could, Plus500 remains a tricky trade share price wise. The jump we have seen today may have been as much to do with the promised share buyback of up to $50m, something which should scare off all but the most ardent of its shorters. What we have seen so far today is a fill of the April gap to the downside at 695p, with the high of the day at 697p. This zone is still technically the area to short the stock up to. However, a break of 700p could target the area up to the 200 day moving average currently at 941p. Therefore, in Plus500 we have a trading opportunity as intriguing as the company itself.
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