Clive I thought you had traded CFD's.
IG Index have a daily CFD's on whether the FTSE100, DOW or DAX finish higher than the previous close.
The Target Price for the FTSE was Higher than 6274.05
The initial spread on the FTSE is 4 Points. You can at 52 and sell at 48. The figures then move depending on how many points it is away from the target price.
If the FTSE100 falls the selling price finishes at 0.00 and for some reason the buying price at 2.5.
If the FTSE100 rises the buying price is a 100.00 and the selling price is 2.5 I understand.
The 2.5 is probably IG's Margin as there is no buying or selling commission.
It all happens in 24 hours and the positions are closed out when the market closes.
Yesterday was a half day, and closed early.
At 2.20am I sold 10 units at £350.00 = £3500.00 Maximum Loss £6500.00 without a stop loss is the FTSE had finished up. The margin appears to be based on the Buying and not selling price, and the Margin required was about £7000.00. The FTSE was down and about 30 points from Target. The DOW had finished lower and the price had dropped. I put on a stop loss at £500.00 and my maximum loss was £1500.00.
In the morning I was showing a profit of over a £1000.00 all the indices were moving in my favour.
At 11.14am I sold another 10 Units at £241.00 = £2410.00. In aggregate I was still in profit, but the Theoretical Maximum Loss was now £7590 on this transaction, and the required margin was about £8000.00.
Will less an hour to market close, and FTSE well down, and with no change of recovering before 12.30pm, still showing increasing profits I sold again.
At 11.40am I sold another 15 Units at £169.00 = £1690.00 . Again in aggregate I was showing a profit, but the Theoretical Maximum Loss on this transaction was now £12465.00 and the required margin about £15000.00
I was watching my position and could have closed out at any point with the click of a button, and in profit.
Yes I put £40K on account to cover the required margins, but my maximum losses on this FTSE100 trade was never more than £1500.00.
Closed out automatically when the market closed at 12.30pm.
What exactly were the risks I was taking?
There is a vast difference between the Margin Requirement and Potential Losses on this kind of trade.
Clive please correct me if I am wrong.
I won't bore you with my trades on the Binary Wall Street Daily Index, but applying the same methodology, I made over £2600.00 and it was closed automatically and banked profits when Wall Street Closed.
I was betting on Certs after my initial sale, was always at least breaking even when I sold further.
IANTO
Finding it slightly odd that between your contact and yourself, you only seem to be able to make winning trades. Where are the losses? Or have you managed to find a system where you don't have any? Odder and odderrer.
Yesterday was the first day I have traded. I was a winner on my two trades, but it required substantial funds deposited to cover the margin requirements, and I am still not entirely sure how margins work.
Buy picking days when the various indices are up or down substantially you can I believe make a regular profit, but you need substantial funds to do it.
If say you sell the FTSE100 at 10 an hour before close and sell 500 units when the market is down 30 points and Wall St is also heading lower and there is no change of it recovering, you will make £10K but could lose in theory lose £90K, and need a pot of a say £150K+ plus to open the position and cover the margin.
It is not something you would risk every day, but the FTSE100 follows Wall Street and is also influenced by the price of Oil my understanding, and by watching them, you have a reasonable idea of what will happen. You would have to pick and choose when to trade.
I can't speak for the person who introduced me to CFD's and Spread Betting, but he has only been trading since October, and overall is making a Profit he tells me.
He can afford to lose money, while I can't and will only bet on what I consider certs.
IANTO
Whatever happened to the good old idea of buying shares in a good solid company when the price was dropping due to events and cashing in when the values had risen due to other events?
Have commissions and taxes etc killed off that little game?
Or is it just not exciting enough for the get rich quick go getters?
No chance of recovering? The US markets can make some amazing moves on news. You could be wiped out by one event. Say 9//11 or something. I watched that on TV live at my terminal and couldn't close my positions fast enough. I lost a little but not a lot as I was hedged anyway. You also need to understand that the euro markets are generally slaves to the US future even when their indexes are closed. Not the price of oil. You say you can't afford to lose and only bet on certs but then also say you took a gamble and a pretty massive one at that. As I say, good luck with it. I'm not one to tell somebody what to do but in all my experience, this is a car crash waiting to happen.
It sounds easy money but there's someone at the other end of your trades who's lost £4K. How come you got it right and they got it wrong?I am fully aware that every small thing in distant corners of the world can affect the Markets.
The FTSE100 is heavily weighted by Oil and Commodity Stocks, and the price of oil and commodities does drag down the FTSE, let alone DOW futures.
It is now 3.30am, and the FTSE Futures have been volatile. By buying in and selling out back to back I have made £4K, and have no open positions. I believe you call this Hedging.
Time to go to bed!
Tomorrow is another day, and who knows what it will bring.
IANTO
It sounds easy money but there's someone at the other end of your trades who's lost £4K. How come you got it right and they got it wrong?
Interesting thread, I hope it continues.
You should post the trades you do as they happen, would be interesting reading and will make sure you stay disciplined with your approach.
Where are the Potash Freaks?
At one time there was a thread on here that suggested a certain Potash Share was the best thing since sliced bread!
They have gone very quiet!
IANTO
Know nothing about it but I bet the way ag commodities have gone those shares wouldn't be doing too good!
Found the thread "Yorkshire Potash" a mine being developed by Sirius Minerals was the flavour of the month, for several months.
What happened?
Change and add couple of letters in Sirius, and you have Serious.
You then only need to stick Con. on the end, and you have:
Serious Potash Con.
I wonder how many who swallowed the initial post, will admit that they feel that they were conned?
IANTO
SO what's yopur thoughts on the FTSe today?