Hobson: Spread-betting is Gambling

THE WEEK: Morningstar columnist Rodney Hobson takes a look at how short-sellers are handling the volatile share price of one pharmaceutical company

Rodney Hobson 28 October, 2016 | 2:08PM

A reader of this column asked me this week about Hikma Pharmaceuticals (HIK), where the shares have slumped from £26.72 at the start of August, slipping below £18 this week despite heavy buying by company directors.

Apparently there have been postings on message boards suggesting that there has been heavy short selling, and also a tale of an individual spread better selling heavily while the spread betting firm has been taking opposing positions.

I do not normally follow Hikma, although it is a FTSE 100 firm with good prospects. I have GlaxoSmithKline (GSK) in my portfolio and do not want another big pharmaceutical company. I don’t read message boards because, although they often have useful information, it is impossible to tell genuine postings from self-serving rumour spreaders. I don’t spread bet because it is gambling, not investing.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
GlaxoSmithKline PLC1,479.60 GBX-0.54
Hikma Pharmaceuticals PLC2,470.00 GBX-4.49

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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