unlimited losses on spreadbet on indexes

[in2uxs]

I've just visited the history files at yahoo to see what would happen to my shares should a Sept 11 event occur.

On average I'd lose about 3% on each company which is not much more than a bad day's dealing. One share BP even went up 4% 😱 .

 

[ANDRE17]

I've just visited the history files at yahoo to see what would happen to my shares should a Sept 11 event occur.

On average I'd lose about 3% on each company which is not much more than a bad day's dealing. One share BP even went up 4% 😱 .

3 % of ftse in 180 pips or 180 £ in a 1 £ bet

if you had a pouns a tick on bp and say it went down 3 % its alot less

with the ftse its like buying a share thats 62.00 £ each -- thats why it hurts and you cant do less than a £

have a good weekend matey

regards
A

 

[new_trader]

Double Stop?

Interesting thread. Would a double stop protect you in the case of a 9/11?

Eg/ You were long on the S&P 500 at 1390 with a non guaranteed STOP set at 1380 and you also had another STOP loss order to SELL at 1350 (in case of catastrophe). Would the second STOP order be opened?

 

[ANDRE17]

maybe but they would both be done miles away from the market in my opinion as a guess so you could be stuffed on both if it bounced

 

[Olipro]

just a thought, but as far as I was aware, I don't think it's possible for the dow to have some sort of cataclysmic (or on the other side of the coin; amazing) gap since this would require for a huge amount of trading to be done after hours while the index is closed which I don't believe is actually possible to achieve; hence I don't really see this as being possible, and of course, assuming it started dumping during the day, then clearly the spreadbet company is going to close you out as soon as your position wipes out your account (or assuming you're a bit more of a 'canny lad' than that; your stop-loss is hit)

 

[Olipro]

Interesting thread. Would a double stop protect you in the case of a 9/11?

Eg/ You were long on the S&P 500 at 1390 with a non guaranteed STOP set at 1380 and you also had another STOP loss order to SELL at 1350 (in case of catastrophe). Would the second STOP order be opened?

if you left these both running and the first stop was executed, then it continued dumping, unless you had an OCO set on the two (assuming your broker has OCO orders) then if the price continued down, the second stop would enter you into a short position (assuming the previous stop closed out your entire position)

 

[ANDRE17]

just a thought, but as far as I was aware, I don't think it's possible for the dow to have some sort of cataclysmic (or on the other side of the coin; amazing) gap since this would require for a huge amount of trading to be done after hours while the index is closed which I don't believe is actually possible to achieve; hence I don't really see this as being possible, and of course, assuming it started dumping during the day, then clearly the spreadbet company is going to close you out as soon as your position wipes out your account (or assuming you're a bit more of a 'canny lad' than that; your stop-loss is hit)

Hi I think the market would come down a fair bit then there would be a void because all the orders were out/filled in the system and then you would get the big gap as people reentered orders after the news --there are limit downs but they dont effect the sell offs --just allow processing of margins etc i think

 

[Olipro]

Hi I think the market would come down a fair bit then there would be a void because all the orders were out/filled in the system and then you would get the big gap as people reentered orders after the news --there are limit downs but they dont effect the sell offs --just allow processing of margins etc i think

There's a few reasons for the circuit breakers, but as far as margin goes, it's not much good; it doesn't take an expert to calculate a client's margin and of course, if a breaker is currently active then the real intent of it is for traders and investors to take a time out, hopefully re-evaluate and stop selling off. but anyone who's caught by a breaker is probably already in trouble as far as margin goes, but it won't count for anything until they've sold into the market and their final loss is realized

 

[new_trader]

Hi I think the market would come down a fair bit then there would be a void because all the orders were out/filled in the system and then you would get the big gap as people reentered orders after the news --there are limit downs but they dont effect the sell offs --just allow processing of margins etc i think

Looking at the historical charts, the S&P dropped around 70 points after the 9/11 attack. If you were long at £10/point you would "only" lose £700- Not pretty, but it wouldn't bankrupt you. I've lost that amount on a few consecutive bad trades. Even at £100/point, £7000- is a very painful loss but it wouldn't (shouldn't bankrupt?) you. Remember, we are talking about one of the biggest terrorist attacks ever on American soil. I think it was you who mentioned a Dr Who factor? Another one I read went something like, "You should only trade withing your sleep level". In other words, you should only have an amount of money in the market that allows you to sleep comfortably.

 

[ANDRE17]

Looking at the historical charts, the S&P dropped around 70 points after the 9/11 attack. If you were long at £10/point you would "only" lose £700- Not pretty, but it wouldn't bankrupt you. I've lost that amount on a few consecutive bad trades. Even at £100/point, £7000- is a very painful loss but it wouldn't (shouldn't bankrupt?) you. Remember, we are talking about one of the biggest terrorist attacks ever on American soil. I think it was you who mentioned a Dr Who factor? Another one I read went something like, "You should only trade withing your sleep level". In other words, you should only have an amount of money in the market that allows you to sleep comfortably.

hi there 70 points on the s+p is 700 spread points -- so its 7000 and 70k for 100 bet !

the dow was down 850 points in comparison so its chunky ! Just yo thought i would point out the losses --- on that day or arounnd that day

 

[new_trader]

hi there 70 points on the s+p is 700 spread points -- so its 7000 and 70k for 100 bet !

the dow was down 850 points in comparison so its chunky ! Just yo thought i would point out the losses --- on that day or arounnd that day

You are right if using CMC market terminology (Unless I am using incorrect terminology).

I refer to everything to the left of the decimal as a point and everything to the right a tick. IG index, which I had been using for a while, does the same thing. I almost made a very expensive error when I opened an account with CMC markets and was about to place a £10/point trade as I have become used to doing with IG index. 😱

 

[ANDRE17]

All my 3 spread accs use 1/10th the index so fter the decimal is a trading tick . I bought ebay once in 10£ a point and noticed they took a while to pick up the trade ! i went for a short walk came back and sold at a profit but it moved quite small that day and it took them ages to close the sell --all the time the price was edging down ! funny that ! Made 7 cents = £70 but almost died when i realised my actual open position --- I think ebay was about 60 bucks at the time !

 

[new_trader]

You could have a scenario where someone had a good system and compounded from 10 quid up to 100 many months or a few years later so with the compounding they were up to 100 a tick -- ok they have a large bank behind them but not one for 500+ pips . Some people do 100 as a matter of everyday trading -- by the way I only do 10-20 on a big day but maybe in a while i will get to 100 and then --- 9/11 --the lots gone !

One thing I have learned through back testing is that every single point is precious. A trader should never be reckless with any trade regardless of the size of the bet or bank account.

someone had a good system and compounded from 10 quid up to 100 many months or a few years later

Anyone with the right trading attittude would have treated a £10/point trade as seriously as a £100/point or even £1000000000/point trade. The problem I had as a novice trader was that I was taking bigger risks with small bet sizes because I didn't have much to lose. This, I think, results in a reckless attitude to trading being ingrained.