Help

[keng]

I need some help re CFD's on trades during the day. I have two accounts. The one with Investec the investment account. The other with Standard which I use to trade, actual buying and selling of shares. I have Never touched my investment account for over 15 years. In this Investment account I have 1600 WHL and other retailers from the unbundling of WOOLTRU. Wanted to hedge further loses on WHL so sold 1600 CFD on this account. This is the first time I have dealt with a CFD This will sound stupid to you guys but I don't understand the closing of the position. This morning WHL was at some point down around say 2% at that point I was going to buy (close)1600. I'm in the money. On the trade screen it didn't matter if I selected market price of other, simply reflected net return of my margin. At time of writing 12 o'clock WHL is now up (tears) Assume I closed a 12 o'clock Assume the closing price a 17h00 is down What happens? Do I get the 12h00 price or the 17h00 price. If it is the 12h00 price why does the trading screen not reflect a net loss to be subtracted from my margin? Please help this is driving me nuts.

[Invinsible]

If you have never traded shares comfortably just stay away from CFDs.

[Invinsible]

If you have never traded shares comfortably just stay away from CFDs.

[Preston]

I assume same principle as SSF. You will get the 12h00 price and the net loss is usually deducted once OST system updates. **** Give this a try****, Try to withdraw money from that account and then check the available fund to withdraw. It should give you an error message.

[keng]

@Invinsible I have been trading in Shares for decades. I have no intention of using CFD's to speculate, simply to provide protection for shares I hold and do not intend selling

[keng]

Hi Guys I appreciate your replies but I obviously haven't properly explained what the problem is, so will try again. When one trades SHARES you can IMMEDIATELY see the financial cost/profit on the TRADING SCREEN and impact on account balance. When one closes a position on a CFD the TRADING SCREEN gives no indication of the financial implications to the account balance. So all I was attempting (obviously not too well) to verify is what price is used when closing a position during the day. Being either: a) The price at TIME of closing, or; b) The closing price of the asset for the day i.e @ 17h00 In the morning my portfolio screen reflected a gain of R1200 on my 1600 WHLcfd which has now swung to a loss of R1900 impact R3200 Not concerned with the loss as I hold 1600 WHL. So it doesn't matter if the actual share increases or decreases If I had closed in the morning If the answer is a) I would have made R1200 If the answer is b) Then one is closing blind

[#7]

Im not sure how your planning exactly to decide when to climb in and out and what the strategy is but one word of advise is that remember CFDs charge interest at 9(?)% per annum on the exposure.
You also have to pay over the dividends if your short, which is about another 3%.

That means if the share price stays the same and you hold the CFDs for a year you have lost 12% already, or alternatively woolies needs to lose more than 12% for you to effectively hedge.

Not saying it cant happen (that woolies goes down by 12%), just saying its something to keep in the back of your mind when executing this position.
I dont know much about options but they could be cheaper in the long run.

[Preston]

Keng 1) Click on my Account 2) Click on Trading account 3) Click on P/L report 4) From Date : "Enter today date" 5) To date: "Enter today date" You will then able to see the price at which you exited the trade. 6) Profit and loss will update in the evening. Alternatively contact Grant at the trading desk 1. He is very helpfully and knowledgeable and secondly, my favourite, he told RAMS to go and fly a kite.

[SimonPB]

The price at TIME of closing

[Preston]

No Simon, Grant indicated that time of closing is merely for OST purposes ( internal reporting purposes) and price should be at time of exit.

[SimonPB]

what is closing if it not exiting (an he specified difference between closing trade - and close of day 17H00)

[Preston]

So all I was attempting (obviously not too well) to verify is what price is used when closing a position DURING the day.

[SimonPB]

keng , when you were trying to exit/close the position the trade screen only shows return of margin because profit/loss is reflected in real time in your account

[keng]

Thank you all for your replies So as I now understand The price at 17h00 has absolutely NOTHING to do with my profit or loss, It is the price at which I EXIT or CLOSE POSITION during the day

[SimonPB]

yip, the 17H00 price only matters if you are still holding at the close of the day, 17H00

[keng]

@simon AT LAST the penny has dropped.

[Rams]

Preston, when you in a hole, stop digging?

[Preston]

Rams, have yourself an excellent weekend and do not spend too much playing with your family jewel. Cheers

[prancing_horse]

@BC01, There a quite a few errors in you reply.At present interest on exposure you pay around 7% and on margin you receive +/- 3%. Remember when you short a stock you receive interest, not pay, and as you correctly say you pay the dividend.

[#20]

your right, thanks.
Sorry, blonde moment from my side :)