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Online Share Trading

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SSF - underlying share movement to breakeven equation

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Not applicable
Hi All, to all the Maths guru's. I am trying to work out the % the underlying stock will need to move for me to reach break even (incl selling costs). Is there a simple equation because i seem to be confusing myself. I have it as ((total trading cost/SSF value)/gearing))...
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12 REPLIES 12
Not applicable
thought i was the only one!if you buy a ssf and the underlying share price is r100 and u sell it again at the underlying share price of r100 how much do you lose?
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SimonPB
Valued Contributor
well 0.4% value of underlying exposure on both sale an buy .. then your R60 +vat .. then your interest depending how long you held for ..
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djw
Regular Contributor
so that works out at 0.8% plus R120 + Vat = R136.80
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Not applicable
So all the costs that you mentiones Simon devided by you the value of just the SSF excl costs gives you the % that the SSF needs to increase by to get you to break even. That i get, i think. What i am asking is do i then take that figure and divide it by the gearing to get the % movement of the underlying needed to moved the SSF by that amount?
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Not applicable
so if you buy 1ssf underlying share R100=R10000 + .4%=R10400.00 + 136.80 fees=R10536.8 Plus the.4% on sell price(X) x=10000.00 +536.8 + 0.4% x=10578.94 so underlying share must go to 105.79 to break even (intrest was left out) do u guys agree?
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MenuOption
Frequent Contributor
.... yes, and then the more important aspect, SSF are futures prices, underlying is share price. Difference may be +2% one moment and -2% next moment.
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jack12
Super Contributor
I don't quite agree with the formulas used, I would have thought it would 1st depend on the volume bought 1= R60 plus 10 also = R60 2nd Dividends also influence the price 3rd I think volatility also has an influence( at times the underlying rises by 2% and the SSF falls by 1%). Therefore in my opinion it is a superfluous exercise as it is not linear and cannot be plotted. At times the SSFs price is lower than the underlying!
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Not applicable
thanx jack12 thats why i could not make sense out of it! so if u want to close a deal how do u know what price u going to get? lucky dip?
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jack12
Super Contributor
I use the Matrix provided (not very accurate due to volatility) otherwise yes, lucky dip IMO. You have to follow the shares you are interested in (put a order in for a far lower price and in the Trade status window you can follow the SSF price accurately) This will give you an indication of the difference between the Underlying>SSF. This is the system I use
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Not applicable
I have made a simple excel spreadsheat... Just work on the share price. Colums - Underlying Buying Price, Underlying selling price, Units, Amount (Buying* Units), Fixed cost(R 136.8), Variable cost (sum Buy*Units+Sell*units)*0.004 , Total cost (Fixd cost+Variable cost) , Profit /Loss ( Sum (selling*Units - Buying*units) - Total Cost. On this can work out day trading for short an long. Than extra colums - day , interest (sum purchase* interest rate) , total interest ( daily interest * days) , Total profit loss ( Sum Profit /loss - Total interest ) So one can play around of looking the effect of holding the share for differnt periods of time. And finaly just the % colum (sum Selling - Purchase)/ Purchase - to see what share needs to rise or fall to make profit. From here one can extend extra so that you only put in figures ( buying and selling at underlining... to immediate work out what if you wrong...for stop loss and proftit on 4 or 5 different scenario's that can happen. Although not bringing in divivdends it help me a lot in making decisions.
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Not applicable
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Not applicable
don't forget what is probably the biggest cost of all, the bid ask spread - which an SSF will do a great job of magnifying for you
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