Could be:
Christmas rally
October 'til May seasonality?
printing presses doing their thing
or a whole raft of other things.
Zynga - CFDs - brag(?) thread?
- Thread starter Aaron Sice
- Start date
Could be:
Christmas rally
October 'til May seasonality?
printing presses doing their thing
or a whole raft of other things.
i never hold any postion over the break.
i used to risk the long, but you just dont know what news could come out boxing day over a closed market.
often stocks rally over the break, buti wont be in.
my next move will be long ASX200 in the run up to the election, i think it'll crack 4620.
i used to risk the long, but you just dont know what news could come out boxing day over a closed market.
often stocks rally over the break, buti wont be in.
my next move will be long ASX200 in the run up to the election, i think it'll crack 4620.
Hi Aaron,
When you say above that you paid interest on a FB short CFD, I thought you receive interest when you do a short CFD rather than pay interest?
Is that not correct?
Have you had experience with Commsec's CFD trading platform or heard of any negative feedback about this?
And have you done more of these trades since last posting?
Also, are you doing these trades in a family trust/company name/own name?
With your after-tax trading profits, have you been able to use these to fund deposits on properties?
With your stops, have you considered using ''guaranteed stop-losses'' to reduce the risk of gapping and risk in general?
With margin requirements, if you are using very tight stops, doesn't that create less need to have large cash reserves for possible margin increases?
i've been short TWTR up until Monday open just gone - got out at $30.75.
that's a logged 4070% profit after taking profit all the way down from my entry.
that was a 40:1 as well. God I love UBS London via Delaware LLC. i shouldn't need to explain that because if you have to ask, you probably shouldn't know.
when you short a CFD, and you don't hold the stock (who does?) it's called a 'naked short' - it's like a naked put - you dont hold the stock.
that means i have to borrow someone elses' stock to write the shorts against.
*edit* i should elaborate. with such large positions, if i don't borrow stock to short, my trades can cause fluctuations in the prices. remember i'm 40:1 here, not 10:1.
therefore i have to borrow some stock, almost like a butterfly spread but not do anything with it like i would a normal butterfly spread. the broker takes this borrowed stock and goes long. this is where the broker gets me - i might get paid 2% interest for shorting, but i have to pay 3.5% for the privilege of borrowing the stock and letting them go long to 'make the market'.
it's very, very hard to explain without knowing someone's full background, so i'm trying to KISS but they are complex financial derivatives and weapons of mass destruction for a reason.
it's that borrowing that attracts interest, and short interest and long interest are different rates - in many cases, for the worst. you should also be aware that shorting stock in the US from the USA via London puts all kinds of different requirements out there. CFD positions are different to AUS, margins are different, interest is different....
there are some providers or MMs that waive it for small positions, but these are getting into big boy trades now, not unlike Dazz and his commercial ventures - different playing field.
i always trade with stop losses on entry and then rolling stops on the way down - but i don't tighten them up.
take a looksie at TWTR and the recent pump and dump. i could have been out at $40 but i know this when i see it. news was out - TWTR to $20 - institutional buying of stock to write puts - up to mid $40s and then slammed to $33 almost overnight.
i was only tarding with profit at this stage, so i was willing to risk it. i let it run to $30.50 and got out Monday open.
i only ever trade with a max 20% of my available cash. so if i have $10k, then i trade with $2k - that leaves $8k. another trade would be max $1600 etc with a max of three trades open at any one time.
and yes, that's religious.
that's a logged 4070% profit after taking profit all the way down from my entry.
that was a 40:1 as well. God I love UBS London via Delaware LLC. i shouldn't need to explain that because if you have to ask, you probably shouldn't know.
when you short a CFD, and you don't hold the stock (who does?) it's called a 'naked short' - it's like a naked put - you dont hold the stock.
that means i have to borrow someone elses' stock to write the shorts against.
*edit* i should elaborate. with such large positions, if i don't borrow stock to short, my trades can cause fluctuations in the prices. remember i'm 40:1 here, not 10:1.
therefore i have to borrow some stock, almost like a butterfly spread but not do anything with it like i would a normal butterfly spread. the broker takes this borrowed stock and goes long. this is where the broker gets me - i might get paid 2% interest for shorting, but i have to pay 3.5% for the privilege of borrowing the stock and letting them go long to 'make the market'.
it's very, very hard to explain without knowing someone's full background, so i'm trying to KISS but they are complex financial derivatives and weapons of mass destruction for a reason.
it's that borrowing that attracts interest, and short interest and long interest are different rates - in many cases, for the worst. you should also be aware that shorting stock in the US from the USA via London puts all kinds of different requirements out there. CFD positions are different to AUS, margins are different, interest is different....
there are some providers or MMs that waive it for small positions, but these are getting into big boy trades now, not unlike Dazz and his commercial ventures - different playing field.
i always trade with stop losses on entry and then rolling stops on the way down - but i don't tighten them up.
take a looksie at TWTR and the recent pump and dump. i could have been out at $40 but i know this when i see it. news was out - TWTR to $20 - institutional buying of stock to write puts - up to mid $40s and then slammed to $33 almost overnight.
i was only tarding with profit at this stage, so i was willing to risk it. i let it run to $30.50 and got out Monday open.
i only ever trade with a max 20% of my available cash. so if i have $10k, then i trade with $2k - that leaves $8k. another trade would be max $1600 etc with a max of three trades open at any one time.
and yes, that's religious.
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Thanks Aaron, looks like you've done a few more winning trades.
What you say makes sense.
Reading about this in more detail on Commsec's CFD PDS it seems that for short CFDs you do get paid interest (called "contract interest", at the RBA cash rate minus up to 3%), but also incur a "stock borrowing fee" on top of this which varies depending on the particular stock (eg. 0% for stocks like CBA and up to 10% for other stocks).
This would vary depending on the CFD provider too.
For ASX (exchange-traded) Equity CFDs again for short CFDs you get paid interest (called "contract interest", at the RBA cash rate), but also incur an "open interest charge" (which appears to be set at 1.5%).
So the net effect of interest paid and borrowing costs on short CFDs could be either positive or negative to you depending on the above.
For OTC CFDs the net effect may be more likely to be negative than for ASX CFDs which should be positive as long as the RBA cash rate is over 1.5%.
What you say makes sense.
Reading about this in more detail on Commsec's CFD PDS it seems that for short CFDs you do get paid interest (called "contract interest", at the RBA cash rate minus up to 3%), but also incur a "stock borrowing fee" on top of this which varies depending on the particular stock (eg. 0% for stocks like CBA and up to 10% for other stocks).
This would vary depending on the CFD provider too.
For ASX (exchange-traded) Equity CFDs again for short CFDs you get paid interest (called "contract interest", at the RBA cash rate), but also incur an "open interest charge" (which appears to be set at 1.5%).
So the net effect of interest paid and borrowing costs on short CFDs could be either positive or negative to you depending on the above.
For OTC CFDs the net effect may be more likely to be negative than for ASX CFDs which should be positive as long as the RBA cash rate is over 1.5%.
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hi TPI - CommSEC are a market maker so this would make sense.
the trick is to get a good CFD provider that isn't an MM - very hard with big positions.
even harder when you're an Aus citizen trading US stocks out of London from a US LLC.
i don't dabble in ASX CFDs. that's like going all in on the chocolate wheel at the casino.
the trick is to get a good CFD provider that isn't an MM - very hard with big positions.
even harder when you're an Aus citizen trading US stocks out of London from a US LLC.
i don't dabble in ASX CFDs. that's like going all in on the chocolate wheel at the casino.
Yeah this is where I am up to now.
Also just wondering if you think it is worthwhile using exchange-traded call options to hedge a short CFD position?
i'm not a fan of using options to hedge.
it's never clear cut - most spruikers say you can use 1 contract per contract but it actually works out to be about 3 contracts per 2 CFD positions.
add your delta into that, especially if you're short and bye-bye profit - or be prepared to hang on for a longer period of time in the trade to make it back. the VIX is good at the minute so i guess delta is less of a worry, but you want to short when VIX is low and stock at it's peak and run it right into the heart of the fear trade.
so you're either still a bit exposed at 1:1 +++ but in-and-out ; or you are properly hedged at 3:2 +++ and have to hang in there and hope the run continues.
that just equals MORE risk, not less in my opion, so I tend to just stick to the CFDs. i mean, the whole point of CFDs is max leverage, max profit, max flexibility. start to chip away at one of those foundations and your position is likely to go against you. your ability to exit at the bottom of the fear trade might be compromised as your calls might be deteriorating quicker than you can recoup the profit - espeically if the VIX moves with the short (which is what the CFD wants, but not the call).
in other words - why bother? you're either for a position or against it. you're either in, or out. hedging is for technocractic pansies with no conviction.
if you have to hedge, it's too risky a trade. set it aside, watch it and wait for something else.
remember, shorting is predatory - so think like a vulture. do you want to eat the lion dying on the savannah with enough energy to swat you, or go for the cheetah stuck in the mud by the river bank? one has more meat but can kill you, the other is less of a feed but a sure-fire bet.
it's never clear cut - most spruikers say you can use 1 contract per contract but it actually works out to be about 3 contracts per 2 CFD positions.
add your delta into that, especially if you're short and bye-bye profit - or be prepared to hang on for a longer period of time in the trade to make it back. the VIX is good at the minute so i guess delta is less of a worry, but you want to short when VIX is low and stock at it's peak and run it right into the heart of the fear trade.
so you're either still a bit exposed at 1:1 +++ but in-and-out ; or you are properly hedged at 3:2 +++ and have to hang in there and hope the run continues.
that just equals MORE risk, not less in my opion, so I tend to just stick to the CFDs. i mean, the whole point of CFDs is max leverage, max profit, max flexibility. start to chip away at one of those foundations and your position is likely to go against you. your ability to exit at the bottom of the fear trade might be compromised as your calls might be deteriorating quicker than you can recoup the profit - espeically if the VIX moves with the short (which is what the CFD wants, but not the call).
in other words - why bother? you're either for a position or against it. you're either in, or out. hedging is for technocractic pansies with no conviction.
if you have to hedge, it's too risky a trade. set it aside, watch it and wait for something else.
remember, shorting is predatory - so think like a vulture. do you want to eat the lion dying on the savannah with enough energy to swat you, or go for the cheetah stuck in the mud by the river bank? one has more meat but can kill you, the other is less of a feed but a sure-fire bet.
Wise words, thanks, took me a while to digest it but I agree with this!
Thanks. Lost a lot of money early in the piece by over hedging, chasing trades and over -trading.
Now I just wait for the sure fire bet and stick to my capital rules and Im reasonably safe.
Now I just wait for the sure fire bet and stick to my capital rules and Im reasonably safe.
To publicly answer the raft of recent PMs, im personally watching 3D printing stocks for shorts.
you might also note i'm not often long.
all trades are fear based.
short is the fear of losing money.
long is the fear of missing out on money.
buying is hope and pray for growth. selling is protectionist.
one is a significantly stronger type of fear than the other, so i trade this - and this only.
all trades are fear based.
short is the fear of losing money.
long is the fear of missing out on money.
buying is hope and pray for growth. selling is protectionist.
one is a significantly stronger type of fear than the other, so i trade this - and this only.
Im watching the latest GoPro (GPRO) IPO.
Listed at $24 and currently double that. Looked like it would turn over Mon night, shooting star, only to gap up an add another 20% to the upside.
This is just mania. Pure and simple. The fear of missing out. This is a stock with an IPO valuation of $3b. Current stock price puts it on par with Facebook.
While the future is full of hopes and dreams of another photshare platform etc....its not here yet and yet the stock price reflects a current income stream akin to instagram.
So im waiting for the signal to short, and leverage the position to the hilt.
Listed at $24 and currently double that. Looked like it would turn over Mon night, shooting star, only to gap up an add another 20% to the upside.
This is just mania. Pure and simple. The fear of missing out. This is a stock with an IPO valuation of $3b. Current stock price puts it on par with Facebook.
While the future is full of hopes and dreams of another photshare platform etc....its not here yet and yet the stock price reflects a current income stream akin to instagram.
So im waiting for the signal to short, and leverage the position to the hilt.
Aaron, what is this signal you use with your approach?
A technical indicator on a chart?
Can you do it on fundamentals or new information/news?
Charting, volumes and rumours.
Its like the psychic section of Womans Day around here...lol.
Its like the psychic section of Womans Day around here...lol.
You know the beauty of a GoPro is you can FF to know where the SP is heading!
pinkboy
nasdaq is a fickle beast. if facebook does well, then it pulls on every stock - sometimes up to a percent per related stock.
the dow or sp would move maybe 0.2 - 0.4% compartively - say, if CAT does well then Alcoa might move 0.2% too. never pays to be short come earnings.
i may have to wait until october for the signal, but i'll wait. i've been told i'd make a great bell tower shooter.
i just look for stocks with one income stream and play them against their peers in the same index. i prefer tech because its fickle, like their market.
