Best Thread Capital Spreads

[shortorlong]

Tick data?

Hi Simon,

I would like to do some back testing and therefore need tick data. Capital Spreads tick charts only go back two days. Is there a way to access historical tick data?
I only have the patience to test about a months worth. but more would be better.

best regards,
Shortorlong

 

[capitalspreads]

short or long

I am afraid that although we can access this data for purposes of trade checking it is a time consuming activity. I would suggest that you ask one of the data providers (reuters, bloomberg, com stock etc). Historical data is generally very cheap from these guys (if not free) it is live data that tends to be expensive.

Simon

 

[shortorlong]

I am afraid that although we can access this data for purposes of trade checking it is a time consuming activity. I would suggest that you ask one of the data providers (reuters, bloomberg, com stock etc). Historical data is generally very cheap from these guys (if not free) it is live data that tends to be expensive.

Simon

ok, I'll investigate
cheers
shortorlong

 

[Jbat001]

Simon,


I see you're opening up some interesting new markets - I checked the commodities page this morning, and saw the following:-

"Carbon Emissions December 08"


I thought - WTF!?

I don't know if other SB companies have taken this up, but I definitely take my hat off to you for getting that one in. I guess, depending on your hedging procedure, you will at some point be buying carbon contracts to hedge risk, and that's a great thing. Although climate change is a very divisive issue, anything that can allow the retail rather than institutional traders to get involved in carbon trading is bloody good news in my book, and will potentially massively open up the market and raise the profile of the issue - well done!

 

[capitalspreads]

carbon emissions

jbat

thanks for the comment

I have to admit that one of competitors (at least) does already quote carbon trading although as always on a much wider spread !

I must admit that I am slightly in the sceptics camp on carbon emissions as the only uses it actually appears to have is for extra taxes to be gouged out of us under the pretext of 'saving the planet' or for failed politicians to try to resurrect their carreers and for current ones to sound as though they are actually doing something when everyone knows that no matter what the UK does it will not make a blind bit of difference as the emerging markets will wipe out any marginal gains made by us wearing sack cloth and ashes.

smoke and mirrors

Simon

 

[nkruger]

I must admit that I am slightly in the sceptics camp on carbon emissions as the only uses it actually appears to have is for extra taxes to be gouged out of us under the pretext of 'saving the planet' or for failed politicians to try to resurrect their carreers and for current ones to sound as though they are actually doing something when everyone knows that no matter what the UK does it will not make a blind bit of difference as the emerging markets will wipe out any marginal gains made by us wearing sack cloth and ashes.

smoke and mirrors

Hear hear, Simon. Get yourself voted into the EU so you can voice the opinion of a lot of us !!

Now the real reason I'm writing:

I have just opened an account with CS, mainly, I must say, because of your frank and honest replies on these boards - not many other SB Companies here I've noticed - anyway, one of my FAVOURITE indexes is the Iberian IBEX. Have you any plans to add it to your arsenal ?

Nick.

 

[nkruger]

yes, but only if you stop stinking of garlic and getting pi**ed all day on wine

Mods Note:

Warning given over this post.

A friend of mine has gone to live in France and in his village, nearly all the local males go to the cafe for their breakfast in the morning (7.00am) And what do they ALL have with their brekkers ? Yes, you guessed - BRANDY

 

[bracke]

Shares On Loan

Capital Spreads

1 Are the shares on loan shown for a share all being used for shorting?

2 If the answer to the above is yes why are shares not required on loan for going long?

3 If the price rises more than was anticipated does the shorter have to borrow additional shares to cover the rise?

4 If the price falls can the shorter reduce the number of shares he is borrowing because there is less risk to his position?

Regards

bracke

 

[capitalspreads]

brake

can i have some context...

what do you mean by "are the shares on loan shown for a share all being used for shorting"

shown where?

simon

 

[capitalspreads]

nkruger

We have been looking at IBEX for a while but have still not received permission to use the data.

Simon

 

[bracke]

can i have some context...

what do you mean by "are the shares on loan shown for a share all being used for shorting"

shown where?

simon

simon

On the advfn site using the epic aht and looking at 'financial' the amount of shares on loan is shown both as a % in issue and as a % in crest.

There has been a large increase recently and I would like to understand the relationship between shares on loan and shorting. Hence my specific questions.

Regards

bracke

 

[capitalspreads]

brake

in the 'real' world to go short of stock you must borrow the stock from somebody as you have sold them to the buyer. The buyer is expecting to take delivery of the shares.

So if I sell 5000 M&S shares I must deliver these to the person who bought them from me on the settlement day. If I do not have the shares then I must buy them from a third party to deliver them on.

By 'borrowing' the stock from another holder I am agreeing, effectively, to buy them from the lender today and then sell them back to him at a later date. The cost of doing this is generally the cost of borrowing but can be more if there is a shortage of the stock overall. Not every holder will lend stock so occassionally you get situations where your broker is unable to get his hands on stock for you to borrow. In this instance you can then become a forced buyer. Sometimes heavily shorted stocks get squeezed in this fashion.

whatever happens to the price of the share you will of course still need to borrow the same absolute number of shares but your borrowing costs will reflect the value of the stock you are borrowing. if the share price goes up then you will be 'borrowing' more in value terms so the return gets greater. If the share price falls then your borrowing will reduce.

If you go long/buy then you must put up money for the transaction, not stock, so there is no lending involved. When you sell you are giving up stock in return for money (i.e the other way round). The point is that if you are actually going short with your sell, rather than just selling out of a long position, you would then put the proceeds of the sale (the money you received from the buyer) on deposit as a way of mitigating the borrowing costs of the stock from the lender.

Simon

 

[bracke]

Simon

Many thanks for your detailed reply....but another couple of questions.

1 When I see a chart that shows the number of shares on loan expressed as a % of shares in issue or expressed as a % of shares in Crest are all those shares on loan to people who are shorting?

2 Am I correct in using these % as an indication of the total level of shorting in a given share?

Regards

bracke

 

[nkruger]

We have been looking at IBEX for a while but have still not received permission to use the data.

Thank you for your reply, Simon - I'll nudge you in a month or so (if I may) to see how you're progressing with it......

Nick.

 

[capitalspreads]

brake

not sure i am afraid, as i do not know exactly what you are looking at.

but in general i have to assume that the greater the % of shorts the greater the opinion that the share is under pressure.

you have to remember that sometimes shorts are not actually sell positions but are just differences in settlement periods (i.e option expiry deals, dividend bed and breakfasting etc etc)

There are many reasons for a market maker to be short a stock which have nothing whatsoever to do with their opinion about that company. Sometimes it can be a positive indicator as it may show that the various MMs have seen nothing but buyers on their books but have been unable to cover their positions and they are hoping for a seller to flatten them out.

Nick

no probs.. exchanges work to their own timetables and we do not want to be seen to be pushing the issue.

Simon

 

[Jbat001]

jbat

thanks for the comment

I have to admit that one of competitors (at least) does already quote carbon trading although as always on a much wider spread !

I must admit that I am slightly in the sceptics camp on carbon emissions as the only uses it actually appears to have is for extra taxes to be gouged out of us under the pretext of 'saving the planet' or for failed politicians to try to resurrect their carreers and for current ones to sound as though they are actually doing something when everyone knows that no matter what the UK does it will not make a blind bit of difference as the emerging markets will wipe out any marginal gains made by us wearing sack cloth and ashes.

smoke and mirrors

Simon

Ahh, but think more laterally!

I believe that the City of London generates 1% of global GDP - it's that significant in terms of financial power. If an alien came to Earth, while it might be argued that Washington DC was the most politically powerful city on Earth, London would arguably be the financial capital.

So then, what if carbon trading was actually a sop to the traders and financial institutions of the world? Although, yes, it allows governments to 'cap and trade' emissions, and probably raise taxes along the way, it also allows financial institutions to make money. Obviously, you make your spread on carbon spreadbets from me the trader, I make profits from trading the SB market, you either lay off the risk within your book or hedge your risks into the actual market so you're happy, and the market in carbon overall is bolstered by having a higher level of activity. What if it was all just one big moneymaking exercise?

I don't really think this is actually how it happens, but it's a thought!

 

[bracke]

Simon

Crest have stated that 'shares on loan' are used to cover both short and long trades. You appear to be saying that you do not borrow shares to cover long trades, am I correct?

Regards

bracke

 

[capitalspreads]

brake

sorry

i am not that up to date with current repo strategies but forgive this question ...why would you need to 'borrow' stock if you were long?

if you are long you may 'lend' that stock out and if you are short you may need to 'borrow'

no doubt a better informed person may add to this thread on this subject

simon

 

[capitalspreads]

jbat

I suppose on the basis that we quote arms manufacturers / gaming companies / macdonalds (!!?) etc

we might not agree from a social point of view with what they all do but we all still trade in them.



Simon

 

[Jbat001]

I suppose on the basis that we quote arms manufacturers / gaming companies / macdonalds (!!?) etc

we might not agree from a social point of view with what they all do but we all still trade in them.



Simon

Lol! True - but carbon trading has the potential to be much bigger than equities in terms of volume and value - more like FX in a lot of ways. Just about every conceiveable industry has some kind of carbon footprint, so the market is well-stocked with CO2 gas. I never thought I'd actually be trading hot air! Also, all the above companies you name make 'something' of value - hence they have profits and are able to have listed shares that are worth something. Carbon is the first time I can think of a market where the underlying asset is essentially worthless - the value is controlled almost entirely by government regulation of supply, with trading causing only minor fluctuations.

I agree too there are plenty of 'vice' shares out there, and obviously you're not out to try and save the world by promoting carbon trading, but I still think it's a damn good thing that you do, and it's nice to see it opened to the retail trader, that's all