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Online Share Trading

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BLUcfd

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Penny_Pincher
Super Contributor
On what conditions is a cfd suspended from further taking up new positions. Like Blue Telecoms for eg. Why would std bank have suspended further positions?
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5 REPLIES 5
mullet_fish
Regular Contributor
Interesting.....?? Share on bull run ?
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orange68
Super Contributor
lack of liquidity from the underlying?
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Not applicable
most likely a combination of exposure and liquidity. On illiquid stocks, if the spread widens (buyers withdraw their bids), then sellers can't offload and Standard Bank ends up having to make margin calls on the holders of the stock. Since this inevitably ends up meaning the position has to be closed, it further compounds the selling pressure and widens the spread further. Now if Standard Bank are sitting with large amounts of open positions on their books, they will understandably be getting a bit nervous.
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Penny_Pincher
Super Contributor
@Skaap - So effectively you're saying std bank is assessing the market as not seeing much upward price movement to eminate from this share. Thank you for your insightful comments.
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Not applicable
no, I am not saying standard bank is making a call on the direction of the stock, they are simply weighing up their risk. Too many open positions on an illiquid stock is risky for them - and when that exposure hits a threshold, they need to take action. Those that can remember Dealstream, for instance, will recall how open positions in penny stocks sunk them when their traders couldn't make the margin calls.
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