Mark to Market SSF Question?

[asylum]

Hi Simon just a question about the folowing The mark to market for ACLQ Mar-08 for monday 5 November is R 145-89 and the mid of standard bank bid/ offer for tuesday the 6 November is R 147-32. Does the mid of standard bank now become the mark to market for tomorow.

[divz]

Asylum hows your ssf trading going. Maybe a stupid question but why trade equities rather than ssf? maybe im missing the point but the total risk on ssf is not effectively more than buying the related share. If a share costs r18000 and an ssf 1800 and the share wipes out completely the most you can lose is r18000 in both cases or am i wrong?

[asylum]

Hi Divz not to sure maybe some of our brighter members can enlighten us. As for trading SSf yeah a bit of a ***** to come to terms with all the different terms but getting there bit by bit.

[JohnnyCash]

Divz, correct on the account that you only buy the equivalent SSF that will equal your total exposure if you bought the actual shares.
So in ur example if you were going to buy R18,000 worth of underlying shares, you can do the exact same transaction with SSF and only put down the margin of R1,800 (if only 10% is required). The catch comes in with the fact that people generally will buy R18,000 worth of SSF cause they have the funds and that is equivalent to R180,000 of the underlying. Then a 10% move on the underlying will wipe your total margin and your position will be closed. If u only bought R1,800 worth of SSF and the share goes down to Zero your R18,000 will also only be wiped when the share reaches zero

The main diferentiator in above example will be what you do with the balance of your cash! All things being equal you will loose out if you left it in the money market at 8% whilst paying around PRIME on the SSF borrowed portion

[asylum]

and divz the advantage off SSF is that you only pay R70 brokerage fees which makes a huge difference when dealing with small profits.

[SimonPB]

asylum, M-T-M kicks in around 7 or later and this then over rides our spread. Then in the morning we revert back to our value at 7.30am.

[divz]

Thanks Johnny i assume though that you have to leave some cash in your account for daily ssf adjustments.

[JohnnyCash]

Yep, unless you want those sms's telling you your funds are depleted and your ssf may be sold by OTS!!!! You get these sms's when momentarily the actual bids value away so can be very stressing!