ScoTTyB

Just to add something on options. Basically they are a 'bet' in whether something goes up or down within a certain time limit, if you're wrong you lose the lot. This may sound bad but they are excellent for shorting the markets. This is because if you place a short on a company your risk is limitless, the price could essentially move up to infinity. By using options you can limit your risk to your investment.

The way I see futures, and I may be wrong, is when the market closes, this is when the futures kicks in. The FTSE100 will close at say 5000 and open at 5050, it's this after market movement that is the futures.

marky1

Yeah you are wrong on the futures. They are open alongside the market. Basically a FTSE 100 future allows you to buy a "basket" of the 100 shares, with lower margin and therefore higher leverage. It is priced from the cash market but takes into account time to expiry and dividends etc.

bluenosewrx

iTrader: (2)

any specific tips on individual companys in the FTSE 350, RBS and LLoyds seem to be downhill spirraling at the moment.

Thanks.

Mac

GlesgaKiss

Just thought I'd update this considering what's happened to the price of Gold in the last few days...

The limit on my original contract, which previously showed a substantial loss, was hit last night giving me my profit. I then caught it on a dip again today and have just closed another contract with a good profit! Now have an order set for another dip in price, but not sure when, or even if, it will be triggered considering how a weakening dollar would affect Gold now. Surely send it much higher?

Any thoughts?

GlesgaKiss

Today would have been a good day to short RBS, but that's something you won't want to get into unless you have a lot of time free to firstly learn how spread betting works... understanding the risks, and then actually trade. Sorry I can't be of any more help, but I've not been keeping an eye on much these last few weeks other than what I'm holding.

TelBoy

The charts for gold look very bullish at the moment. If it closes above 1071.34 today (and it 99.9% will) then i think you'll quickly see 1100, and from there 1200.

GlesgaKiss

I will be keeping an eye on things over the next few days and possibly trading it again, depending on where it goes. The last trading range was quite comfortable for me because when it dipped to almost 1025 as the dollar gained strength, I was perfectly happy to sit on the loss for the time being, as I was almost certain it wouldn't go through 1020.

alloy

Gold pretty much at all time highs breakthrough could open the vault and price could explode, weakness in equity could also support this as people look for risk aversion gold historically seen as safe haven but dollar may also find strength. The old addage buy high and sell higher springs to mind

RBS short has been my bread and butter for a while now, also chance to find long exposure in BARC at extreme range values to hedge risk. Arguably a lot of value in the market with todays price action, although having tested support around 5000 perhaps caution is key as if it does break lower from a technical level there could be around another 6% to give back!

GleagaKiss- what are you trading at the moment just gold?

GlesgaKiss

Thanks for the info.

At the moment I'm pretty much fully invested, although some of my holdings are only intended to be for a few weeks. Infact I was considering selling shares in one of them today. The only spare money I have is a few £K in my spread betting account... so I'm trading Gold with it. Only because I'm getting familiar with it's relationship with the Dollar and keeping up to date with any news.

Any other areas to look at for trading? I would say I'm only playing it safe, trading the right way in a trend based on fundamentals. Also going to be keeping an eye on RBS tomorrow.

Any advice welcome.

alloy

I couldn't possibly give advice on a public forum, see my PM if you do want to tap into some resources, other than trading is high risk so only play with what you can afford to lose!!!

Sounds like you are doing alright though so your strategy should hopefully work in the long run so long as you strip your emotions away from your positions otherwise you're then gambling and red or black down the casino will give you better odds

john banks

Just sold half my gold at near to $1092/oz.

alloy

Nice John, seems to be coming under a bit of traffic up there doesn't it, you still going to be a buyer on dips?

I punted NXT last night in the auction to the long side off the back of their previous updates being pretty decent, that came in lovely today although i sold out a percent off the days high still 5% aint a shabby return for 16 hours! Also long a few of the miners which are having a strong day and got a few BARC which are looking healthy! Glad i bought back 90% of my shorts yesterday, i think there still remains underlying optimism out there amoungst investors, press and macro data broadly healthy as well

john banks

Yes I'll buy on dips, dollar looks oversold. I'm holding pharma/oil as they haven't really gone mad. I've also sold Charter International which I've held for a while, taken a small loss, but much less than would have done had I sold before.

Roubini's recent comments interest me. I think optimism is overdone and it is my chance to take profits/minimise future losses perhaps.

Dingdongler

I take it not physical then? Be careful at some point there will be no more dips, just a slow ascent and plateau. At that point you will have only your dollar and gbp backed worthless paper assets

TelBoy

You what?

john banks

It is as physical as ETFS PHAU is claimed to be 7% gain in a week is unlikely to be sustained.

When everyone is this excited about Au and it is all over Bloomberg like a rash, it is time for me to get out for a while

alloy

Well you have to been in it to have any chance of winning it John! I think your caution is wise though as the text book has been thrown out the window this year, Dollar/bond/equity/gold relationships all messed up probably to do with heavy Gov stimulus etc. does make things tricky

GlesgaKiss

I was buying on the small dips in price today, but I'm out of it for now. Think it's too risky, as you say, to be long on Gold right now.

Dingdongler

John Banks, you are one of the wise ones on here, you should know better and have a stash of physical.

Telboy, I'm not sure where to begin mate. Maybe have a read about where paper money (fiat) started, how it was originally backed by gold, the gold standard etc. Then come to terms with the fact that the primary and secondary reserve currencies of the world are fooked ie USD,GBP, Yen etc. Trillions in debt to the rest of the world and no idea how that will be paid off. 'Printing' money like there is no tommorrow and convincing fools that won't dilute its value.
The only way the US and UK can pay its debts is either by printing more money and causing HYPER inflation or actually NOT paying ie defaulting. Either way, the currencies are fooked.

China is screaming that it wants a new reserve currency, its then told all its population to start buying gold. I wonder why? China is the largest holder of US dollar backed debt, and it wants out but has to do it slowly or will shoot itself in the foot (by devaluing its own dollar based assets)

The spike in price over the last 36 hours is because India bought £200 million of gold from the IMF, these countries no longer want bits of paper printed by countries like UK/US which themselves are compromised by Trillions of debt.

In summary, the USD, GBP will continue to fall in value/purchasing power, gold is the ultimate store of value. Its rise has not even begun.

This may seem like the ramblings of a madman, but I can't summarise everything in one post, and I don't think day traders are seeing the bigger picture. If you are interested you must go and read, it will be more interesting than endless threads on bbs about the BNP bros! LOL

GlesgaKiss

Good post. There is also talk of China buying gold at a similar volume to India, isn't there?

TelBoy

It's a good post, Mr Dongler, and one i won't attempt to address under the influence of alcohol with the football on!! But please just expand upon your assumption that the US and UK will inevitably default. What timeframe are you assuming here, and what other assumptions are you making in the process?

Dingdongler

Glesgakiss, China will buy on the sly. If it gets out that they are planning a big purchase of gold, its price will rocket (prior to purchase) and the dollar will tank. They would take a double hit.

Remember China only has something like 5% of its foreign reserves in gold, a lot less than many countries. When it starts buying, it will want loads, it just needs to time it right.

Telboy, I never said they would default, its one of the options. How do you think they will pay back the trillions they owe? Do you think you can produce unlimited amounts of an 'asset' and not devalue what its worth?

TelBoy

Why wouldn't they just add to the national debt until more fortuitous times?

Dingdongler

They will, its an option, but we have reached a tipping point. Its 'investors' the providers of that debt are thinking enough is enough we won't get this back. On top of that the UK is printing more of the same paper that the debt is denominated in, so the investors see that even if they get the money back, that money will be worth less

TelBoy

Perhaps. But unless i'm missing something, the possibility of the UK defaulting on its debt isn't even remotely priced in. You either have an insight that should/could/will make millions or it will happen so far into the future that it's being fully discounted right now.

GlesgaKiss

Some links to recent(today's) articles on Gold...

India propels gold to new high

Gold hits fresh record on bank buy-up speculation

Gold soars after India's buying spree

Here's a snippet from the third link

Investors have driven up the price of gold, which broke above $1,000 U.S. an ounce in early September, seeking a hedge against inflation they fear will be unleashed by the massive amounts of stimulus spending circulating through the system.

But India's move - the largest central-bank purchase in at least 30 years, according to Bloomberg news reports - should be seen as nothing more than a central bank deciding to diversify its asset base, said Bart Melek, global commodity strategist with BMO Capital Markets.

"They certainly have worries about the U.S. dollar longer-term and, as a matter of policy, want to diversify."

He added, however: "I'm not sure the average person can assume anything about a central bank's action to forecast what's going to happen with inflation or the U.S. dollar."

John Nadler, senior analyst for Kitco Metals, a precious metals retailer, said: "The perma bulls would interpret this to mean central banks are confirming gold is the ultimate money. But India's purchase is just a normal part of currency management practices."

Nadler said gold's run above $1,000 U.S. and the U.S. dollar's 14-per-cent slide since early March are nothing more than a bubble driven by hedge funds.

Much as they did using the so-called yen carry trade before the financial crisis began, funds have been borrowing U.S. dollars at near-zero interest costs to purchase higher-risk assets like stocks and commodities.

"As soon as the U.S. Federal Reserve reverses or even show signs of reversing interest rates, this carry trade party is over," Nadler said.

Once rate hikes begin, they will come quickly, knocking the value out of commodities like oil and gold that have been driven far beyond fundamentals by hedge funds, Nadler warns.

To buy gold now is likely to buy at the peak, he cautioned investors.

Dingdongler

Alan, those are all the arguements against gold, no asset will have everybody singing in its favour. They also said the same thing at $600n $700,$800,$900 per oz etc etc. Nobody wants to talk up the price of gold, not those that want to continue to propagate the myth of paper money, and not those that want to accumulate gold.

Remember, we live in unprecedented times in terms of national debt and money printing, we have reached a tipping point. Gold hit circa $800 in the 1980's, think what it could be now with inflation and the perfect storm we see.

Of course I could be wrong, but not to have some money in physical gold seems foolish to me.

GlesgaKiss

The articles aren't all against gold. I just posted that one because it sounded ridiculous to me. At the end of the day it seems about 50% of analysts are wrong about both short and long term movements. I just try to use common sense, and as you say, I can't see the value of gold doing anything but rising in the long term.

Agent_Smith

This will be why we are swamped with secondhand gold buyers on the telly then! Definitely worth checking down the back of the sofa then.

john banks

A stash of physical gold is a PITA for assay, storage, insurance, transportation, prompt trading when you want to etc... I'm happy with the physical ETF, the silver one I had was suspended as it was using an AIG derivative/underwriting.

In the long term gold may be an interesting story (I've kept half of it), but I'm not a guns and tinned beans/foil hat crazed gold bug and will never wed myself to a bull/bear stance on one asset for the long term.