alphahunter
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I'm wondering if you've been in that situation before.
I placed a Long spreadbet on a stock with a Guaranteed Stop Loss. At the time of the bet, the minimal distance was 5% for the stop to be triggered.
The following days, I adjusted the GLS up and down as to keep in line with the share price, at a 8% level so that I wouldn't risk to be stop-loss hunted (if that happens) in times of low liquidity (lunch time) and a potential 8% loss was a level I was confortable with.
The company whose share I bought are now subject to a CONDITIONAL take-over and the price shoot-up. The problem I have is that the spreadbetting company has as a result amended the minimal distance for GLS to 30% and I can't adjust up the level of protection on my long position to the usual 8% (or 5% for that matter) of the prevailing SB-quoted selling price, or even move it up as my GLS is still withinthe 30% (by a fraction) minimum distance. To add insult to injuries, the non-GSL slippage factor is...30%.
The way I see it, is that I paid a insurance premium to get covered at 95% and that protection has now been withdrawn and replaced with a 70% cover as the SB company is offloading the risk of the take-over not going through, and the associated volatility back to me. I certainly did not try to "game" the SB company and I think that this reduced level of protection should only apply to new long bets.
Which brings me to the questions
1/ what is actually guaranteed with a guaranteed stop loss if the provider can modify the level of protection whenever it chooses to do so (not really a question I admit)
2/ Have you been in that situation before, what do you think about it, how would you go about it?
Your opinions, comments and possible advice appreciated. Thanks.
I placed a Long spreadbet on a stock with a Guaranteed Stop Loss. At the time of the bet, the minimal distance was 5% for the stop to be triggered.
The following days, I adjusted the GLS up and down as to keep in line with the share price, at a 8% level so that I wouldn't risk to be stop-loss hunted (if that happens) in times of low liquidity (lunch time) and a potential 8% loss was a level I was confortable with.
The company whose share I bought are now subject to a CONDITIONAL take-over and the price shoot-up. The problem I have is that the spreadbetting company has as a result amended the minimal distance for GLS to 30% and I can't adjust up the level of protection on my long position to the usual 8% (or 5% for that matter) of the prevailing SB-quoted selling price, or even move it up as my GLS is still withinthe 30% (by a fraction) minimum distance. To add insult to injuries, the non-GSL slippage factor is...30%.
The way I see it, is that I paid a insurance premium to get covered at 95% and that protection has now been withdrawn and replaced with a 70% cover as the SB company is offloading the risk of the take-over not going through, and the associated volatility back to me. I certainly did not try to "game" the SB company and I think that this reduced level of protection should only apply to new long bets.
Which brings me to the questions
1/ what is actually guaranteed with a guaranteed stop loss if the provider can modify the level of protection whenever it chooses to do so (not really a question I admit)
2/ Have you been in that situation before, what do you think about it, how would you go about it?
Your opinions, comments and possible advice appreciated. Thanks.
