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Online Share Trading

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alsi

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nala
Super Contributor
does anyone trade the alsi? or the almi? is it a good product?
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6 REPLIES 6
Not applicable
You can only trade the ALSI on cfd's as far as I know. Its a safer way of trading than normal shares, as the chances of it dropping 10% on one day is scarce, and you should see the warning sings should something like that happen. The ALSI is mostly used by day traders and not recommended for long term - omo
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cfm
Super Contributor
You can trade the ALSI futures contract using a SAFEX broker. Not from this platform.
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Not applicable
but it is risky stuff, given the huge margin calls and spread. You can also trade the top 40, which basically drives the ALSI. Here you have a couple of options on OST - Satrix or a few warrants.
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SimonPB
Valued Contributor
vitalstats - "chances of it dropping 10% on one day is scarce" ... huh? where've you been the last 6 months? The indices have done more then 10% in a day a few times lately, and 5% or 6% days are common and very dangerous for traders.
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Not applicable
Quite rigth Simon. So let me rephrase. What I meant to say is that the chances of the ALSI dropping too fast for you to react during the day, is much less than that of a share dropping. A share can one minute be trading at 19500 and the next 18000, not giving you the slightest chance of getting out. With the ALSI you can have your Stop Loss setup and should get near it if something goes horribly wrong. With a normal share, if the share jumps suddenly, there's no way for you to get out. If you had a Stop Loss on your share, it would have passed it by such a margin that it would kick in at a price far different from your Stop Loss. This is how I understand it -> Say for instance the ALSI is 19500, then it need to go through 19200, 19000, 18800, 18500 etc to get to 18000, so your Stop Loss should kick in somewhere between 19500 and 18000. Now, say for instance you have a normal share priced at 19500 and next moment it goes to 18000, it then moved straight from 19500 to 18000, nothing inbetween. If you had a Stop Loss, it would probably kick in at 18000 or even lower. That's the way i see it - omo
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SimonPB
Valued Contributor
fair enough, but the issue is then what shares are you trading. Highly liquid large caps will act largely as per the alsi giving you lots of places to exit. Small and mid caps may leave nasty gaps on the way down or up. Of course the reality is that one has to action the stop loss, which I fear the majority don't do.
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