Margin calls Explained to a CFD Trading Afren owning Moron

Comments

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   Daniel Victor

   6 August 2015, 03:05

   Was the question correctly answered on the bulletin board ?

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   MrMoto

   6 August 2015, 03:11

   I know SP needs financial support from readers, but this is exactly the reason why pushing ETX on readers is not a good thing. The 9/10 will be fine, but that 1/10 may lose his shirt, house the lot.

   A very dangerous industry as I am sure these guys can testify
   http://www.independent.co.uk/news/business/analysis-and-features/how-could-a-teacher-on-18000pa-lose-280000-spread-betting-10115157.html

   Therefore please promote with more caution and infrequency

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   Bobby Chariot

   6 August 2015, 03:21

   Ouch that has got to hurt. Bet he’s not a Share Prophets reader then…

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   JSB

   6 August 2015, 03:40

   Let’s hope he means 40k shares, and show a little sympathy rather than calling him a moron. He could quite easily have just made a terrible mistake and we all make those eh Tom?

   On another note I’ve just had to stump up 15k to cover my short at 100%. More than a bit annoying bearing in mind the suspended price is 1.78 which will never be seen again.
   I did ask IG what they would do if I didn’t cover as I only have one other small position in my CFD account….they effectively said nothing as my other position would only make a small dent in the margin requirement if closed.
   They may be more twitchy on longs to get some cash in the account.

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   J P Spaghetti

   6 August 2015, 03:53

   Poor sod

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   Phil

   6 August 2015, 04:13

   MrMoto

   I fail to understand, one presumes whoever asked the question is an adult, as if they don’t spell it out as to the risks.

   Not knowing what you get yourself into is another example of the consequence of a client state. A state nit picking, a national broadcaster wasting billions telling me how to live my life. What I should eat., 3 meals a day, 5 a day.
   Prime Ministers trying to tell me they can spend my money better then I can, Agencies fessing off huge amounts of cash spying on Mrs 2.4, lives at 26 Acacia Avenue, in case she is a issue for national security. Loony left socialists telling Tom Winnifrith how to run his business, and how easily they spend his money. The regulation of AIM, the best regulated market in the world.I go on and on, and on, and on.

   Ah, but lets look under the counter shall we.

   An investor, in complete defiance of a mega-expensive education system, the envy of most, free for most, hasn’t got the sense he/she was born with.
   A national Broadcaster who is not only a financial malfeasance, but is morally bankrupt.
   A political system that, never mind the cash, think of the abused children.
   An AIM market dominated/riddled with White Collar crime, run by crooks, and finally a bunch of loonie lefties spend some much time spending other peoples money, they never actually get round to spending their own..

   What is the outcome from all this. You go long using a CFD in Afren.

   I also got that margin call. You should NEVER enter a derivative trade you cannot fund. The margin call was for both long, and short, and happens in almost all circumstance when a company has reached the end game, the broker will not accept your risk. I am short in Afren

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   Millfield

   6 August 2015, 04:34

   Not sure that the answer was very helpful. If Mr. Sap bought 40k at prices ranging from 12p down to 1.5p, then his total exposure cannot exceed £4800, and must surely be significantly less.

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   DUCK AND DIVE

   6 August 2015, 04:44

   It’s about time ShareProphets laid the CFD/spread betting game bare. An acquaintance of mine who runs a spread betting business told me that 90% of punters lose their dough – which is why the industry needs to keep spending so much on advertising to attract new cannon fodder.

   If you’re not an insider or a forensic accountant, steer well clear.

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   MrMoto

   6 August 2015, 05:32

   Phil,

   As Duck and Dave states, 90% of investors lose money with spread betting. Therefore actively promoting it via email to users isn’t of benefit to them.

   “Every battle is won before it is ever fought” this applies to spread betting and AIM and even at a casino

   “Loony left socialist” If you are referring to me there, I am most certainly not. A loony maybe, lefty socialist I am not. It is called “feedback” from your customers who both use and contribute both in writing and financially to your site, just because you run the show doesn’t always mean you are right. Just as my opinion or yours may not be correct.

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    db

    6 August 2015, 05:35

    He must mean 40k shares as otherwise he’s answered his own question if it’s 40k cash.

    It is possible to do SB for fun by keeping the amounts in check. At least by keeping long you know your max.

    Going short on GATE at any time was risky!

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    Drunken Sailor

    6 August 2015, 05:51

    Surely he faced margin calls as the SP plummeted and that should have acted as a warning not to keep adding to his bet.

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    Phil

    6 August 2015, 07:41

    Mr Moto.

    I didn’t write that you were a loony left, and you can say what you like.

    The guy is an idiot, IG tell the risk, it is on the IG daily statements. SP have been warning people regarding Afren, the guy made a free will choice to ignore them. Perhaps he followed the moron board sentiments, who knows, if he makes better informed choices in the future, perhaps he wont lose.

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    wildrides

    6 August 2015, 15:24

    Dont trade on margin ……… just dont do it . Sooner or later you will lose it all with one bad trade . Promoting trading on margin is the one thing I dislike about SP.

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    wolfcastle_22

    28 October 2015, 04:30

    I do CFD’s……whilst shirts can be lost on one poor call I tend to stick to £10k max per trade and FTSE 250 stocks only (less risk) stops at -£250 and consider taking profits at £250+….depending on TA or day action……If my kitty ever falls to minus 25% of initial equity of £10k then I’ll leave the game as I put a stop on my own actions (hence if that happens then I shouldn’t be playing the game)….so far so good, make about £200 – £700 a month on average with a £10k pot…not a lot but all in positive territory – and take the profits and leave the kitty at £10k, don’t leave it in and kid yourself the kitty is at £15k with profits, move the profit out, stick to the plan and yes, on one occasion the NET equity was at £8205.36 in the early stages of trading…..panic on but turned it round………carefully….no chasing rainbows

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    warun boofit

    28 October 2015, 15:47

    Derivative trading buying CFDs and and binaries in the UK is high risk, some people can do it and consistently make money but their profits depend on the vast majority being losers, I agree the percentage of UK losers could be as high as 95%. In the US the percentage of losers is not quite as high probably over 70% because many punters use options not as a high risk gamble but as a way of getting extra income by writing covered calls and puts on shares they already own. Done correctly covered calls can involve a lower risk than owning the underlying equity and provide a good income. Unfortunately as far as I know its not possible to do this on UK markets but try as I may I cannot get a sensible answer as to why not from any of the UK based options houses. The nearest I have got so far is that it can be done by placing the trade by phone and there are a few specialist fund managers that write options, unfortunately the spreads offered on the phone are as wide as the Mersey Tunnel. Is there a reason why other than possibly the UK based options writers make so much money from this they really dont want upstarts living in council houses making money by writing options ?