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Community


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Online Share Trading

Engage and learn about markets and trading online

Hedging against uncertainty

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kwagga
Super Contributor
Just saw that the market cap for Newgold is now R 9,402,762,570. If I recall it was under R 7 000 000 000 just a few months ago. My conclusion is that many institutional investors (of which I bet very few are gold bugs)are now buying into Newgold as a hedge against the risk of an extended recession and the certainty of increasing inflation in first world economies. Smart move if you ask me.omo
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22 REPLIES 22
kwagga
Super Contributor
WTF - Some guys just made a killing on NewGold. Some moron sold at R20 something when there where no buyers. The share dropped by 73% just to shoot up again to orininal levels. Simon could you find some explanation for this please.
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kwagga
Super Contributor
The only explanation I can find for this is that some bloke saw no buyers, put in a bit to buy just above the very low buying levels and sold a small amount to himself at +-R21 and then triggered a whole lot of stop losses that all sold to him at that price and make a few hundred grand in a few seconds. LOL - Market manipulation in broad daylight.
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kwagga
Super Contributor
Someone out there is going to be really pissed when they find out that their stop loss triggers where taken for a ride, and they lost a few bar in the process.
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kwagga
Super Contributor
Lesson: Be very cautious when you set up your stop loss triggers and how you set them up. Maybe an alert via sms is a better idea than an automatic trigger.
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SimonPB
Valued Contributor
you can't trade against yourself .. question is why was the market maker not in the market .. and where were the other buyers/sellers ??
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kwagga
Super Contributor
Read that and weep. GLD 19 09 Jul 2009 11:22 7,210 2201 158,692 20 09 Jul 2009 11:22 2,000 2201 44,020 21 09 Jul 2009 11:22 1,000 2210 22,100 22 09 Jul 2009 11:22 1,000 6500 65,000 23 09 Jul 2009 11:22 1,000 7150 71,500 24 09 Jul 2009 11:22 17,150 2109 361,694 25 09 Jul 2009 11:21 5,000 2109 105,450 26 09 Jul 2009 11:21 10,000 2109 210,900 27 09 Jul 2009 11:21 10,000 2109 210,900
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DEP
Super Contributor
JSE should investigate?
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Electrox
Super Contributor
he is one smart man.. give props where its due..
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SimonPB
Valued Contributor
oh the JSE investigation will already be happening .. they monitor in real time, the only exchange on earth to do so ..
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Electrox
Super Contributor
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Brazen
Super Contributor
Geez. Surely they are gonna reverse those trades.
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EkisDoep
Frequent Contributor
But how does the computer automated system work? If I want to sell at R20, will it only make the trade if there is a buyer wanting to buy for R20? Or will it make the trade if there is someone wanting to buy for R30?
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SimonPB
Valued Contributor
it you want to sell at R20 and there is a buyer at R30, you'll trade at R30 ..
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kwagga
Super Contributor
No, but if you were the owner of a few shares prior to this "opportunity" you could've made this happen.
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SimonPB
Valued Contributor
more then a few required .. an as brazen says, already reversed ..
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kwagga
Super Contributor
But you don't need that many. Once the buy price is triggered, automatic stop losses will take care of the rest.
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SimonPB
Valued Contributor
well currently to drop the price 20c requires 17,000 gld's ?? and how many auto stop losses are out there ??
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HateGauteng
Super Contributor
Dammit missed a golden opportunity. That big dip in the graph looks cool though!
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kwagga
Super Contributor
But there where no buyers above R 21 when the oke did his thing, except if you mean that he had to take out anyone above this level in a very short period of time to be able to catch the marketmaker off guard ?
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