Archive for March, 2009

No FTSE 100, no Dow, no short and no long. But wait a minute! what about my Call 4000 option for April? I’ve gave my friend permission to manage it. He holds the same position so let him to decide.

I need a vacation! see you in April

The £200 offer is no more valid.

Hi all,

Tradefair offers one year subscription for FT (worth £149) for new accounts. You need to make a £100 deposit which is fair make two trades (not shares) and that’s it. This is a great offer… too bad I have an account with them already…

In one weekend I’ve read one journalist saying that soon we will see the S&P 500 at 500 while other one said we already reached the bottom and the direction is up. Who is right? one of them, that’s for sure. But really when it comes to predict where the market goes or where a share price goes no body knows a thing.

You want an example? voila:

When the oil touched $140 a barrel last summer all the smart people said that soon we will live in a world where a barrel cost $200. In fact most of the analysts where sure that the only way is up. When it crashed and the price was $40, suddenly all the smart people from the city said that soon it will reach $20. In both cases they were wrong and to be honest, most of the time the get them wrong.

I have a friend that says that when analyst tells you to buy it is time to sell and when they tell you to sell it is time to buy. That’s why he bought GE at $5.80 and now it is almost $10.

I was surprised to see on Friday morning at Paddypower homepage that 90% of the opened positions on the FTSE 100 were short. It was obvious for me that after the rally on the Dow on Thursday the direction is up. But this is MY opinion and 90% of the people thought a bit different.

The point is you should decide for yourself. If you think that the FTSE 100 will go up then buy it. Your opinion is not worth less than others. And if you were wrong so at least you can learn from your mistakes.

If you want another example here it is:

Last year I was so busy at work so I didn’t have the time to follow the market. So I thought that giving my hard cash money to a fund manager would be a good idea.

Well it was a difficult year and in less than 4 months they lost me 20%. So one can say it was a difficult year so you can understand why they lost my money. But! they should be professional. They should know how to read the market and how to gain profits when the market is going down. And they don’t. And most of the funds manager don’t know. In the end I took out my money and they sent me a letter saying they are sorry for the lose. Of course they are sorry but it is so easy to lose someone else money.

So I thought enough is enough. I will do it myself. I’ve started to learn a bit and opened an account with spread betting. In no time I’ve lost most of my money that I put into the account. I put £700 and I’ve lost £650. I was depressed and I took it hard. My first thought was to leave it and do something else. But then I took a morning off sat in a nice coffee shop with my notebook and started to think about my trades and why I’ve lost my money.

I came up with 10 reasons why I lost and another 10 rules of what to do and what not to. I put more money into my account and this time I didn’t lose. So I put more money and more money and now I have around 50% profit since October. Compare it with the market it is better. Compare it with any fund and I am still better off doing it myself.

Reading the naked trader gave me a lot of confidence that I can do it myself. In fact I am going to move my pension into sell account and run it myself. I think that only you really care about your money and only you can run it wise. And if you lose the only person you can blame is you. And again no need to blame yourself. Just LEARN from your mistakes and you will do better next time.

Good luck!

Hi all,

I have 2 shares that I bought for March rolling with Paddypower. I thought they are automatically roll over to the next quarter but I was wrong. I’ve called today to their customer services (nice lady by the way) and the explained to me that I need to call on the expiry day and ask to roll over them. This is quite important. When you ask to roll over you will be charged half the spread.

So if you hold shares with Paddypower and want to keep them you must know the date they are going to expire and the time and arrange a roll over before.

and just before submitting this post I’ve got an email from TradeFair stating the same. I think on IG Index it is automatically but it is better to check.

After I bought it for 47 points (I thought it was 57… but the position was opened on 47) it went down all the way to 16 this morning. I was already though to write off this option. But then today came an amazing rally on the FTSE 100 and on the Dow and the option now worth 58 points. So for those who bought it this morning…

This is important week for this option. If the rally will continue tomorrow then the sky is the limit for this option. If not it will go back to 15-20.

This just prove that if you have patients with this market condition you can make lots of profit. When you have days that the FTSE is up or down by more than 4% you can double your money in just one day.

Interesting results from IG Group:

Spread-betting firm IG Group saw group revenue for the three months to February rise 33% but said the overall growth of the business has been hit by tough comparatives. Group revenue for the quarter was approximately £62m compared to £46m. The shares crashed by 25%.

I’ve bought Tesco shares on Friday. As I said before I do feel that we are near the bottom and it is time to buy good companies. Tesco is one of them. Of course no one knows where the exact bottom will be. We can see the FTSE well below 3000 and it won’t be a big shock for investors. But I try to take a different direction than the market. Buy when everyone sell, sell when everyone buy.

So I buy strong company with low debts and high income. Tesco is one of them. If the share price will fall more, I will buy more. Same with the other shares I have.

Another thing that I want to do is to buy the Dow at 6000 for the long term and check it in two years time. It may be that it won’t touch the 6000 mark or the opposite, it will go down to 4000. But one has to try and calculate when is a good time to enter and I feel around 6000 is good enough for me. 10 years from now I am sure it will worth much more.

Hi all,

I’ve sent David Jones from IG Index 5 questions and here are his answers:

1) What is the difference between FTSE 100 daily and FTSE daily future? Isn’t it quite the same?

DJ: The FTSE 100 daily spread bet is the one that closely reflects where the FTSE 100 cash index is trading. If you run that position overnight a financing charge will be applied to take into account margin costs and any ex dividend days for FTSE stocks will be applied.

The FTSE 100 future is similar to the futures contracts that trade on LIFFE. The cost of financing and dividends is already taken into account so no adjustments will be made if the position is held overnight.

2) Do you get dividends using spread betting?

DJ: Yes, you will receive an adjustment to reflect dividends paid when spread betting – assuming you are using the daily contracts. For the quarterly contract this is already factored in usually but may need to be adjusted if a company’s dividend policy changes

3) Can you explain a bit more how your Bungee product works?

DJ: Read this page here

http://www.igindex.co.uk/spread-betting/bungee-bets.html

4) Why on Options you can’t set alerts, stop loss and orders?

DJ: Don’t know…

5) And last general question – Do you see more activities or less due to the credit crunch?

The credit crunch has made markets more volatile which has traditionally been good for our business.

Have a great weekend!

After the big fall of the British banks, the oil companies have much more influence on the FTSE 100. This means that the $ against the £ and oil prices set the tone on the index.

Today the oil jumped 9% and the GBP/USD is 1.41 if the oil and the $ can keep this level I would say that the FTSE 100 can go back to 4000 mark very quickly. And in my opinion the oil price on the long run will go up. After all as far as I know it is the most needed commodity and although the green revolution there isn’t any decent substitute to the black oil. So perhaps the FTSE 100 is not all gloom and doom after all.