Jump to content

Guaranteed Stop Premium

This thread contains an account type known as "Limited Risk". Due to regulatory changes this account type no longer applies for European countries. If you have any questions relating to this, or wish to continue the discussion, please start a new thread. 

Message added by JamesIG

Recommended Posts

Hello All, 

I will be on a limited risk account (seems like a sensible place to start for a n00b like myself).

I understand that you pay a premium for guaranteed stops and that's fine by me.

Usually this is expressed in a premium per point (which I understand) however sometimes it's expressed as a percentage eg 0.3%

What I don't know is what this is a percentage of; is it of the total size of the trade or the money borrowed??

Eg Long something at £10 per point with a guaranteed stop at 10 points gives £100 risk is the stop then 0.3% * £100 = 30p cause that seems kind of small given I might pay 3pts for a stop on something else (£30).

Or is it 0.3% of the total size of the money borrowed? Eg Long something at £10 per point which has 1000 base points gives £10,000 borrowed and thus £30 fee for the stop?

Second example seems more likely but any wisdom will be kindly received.

Cheers Angri

Share this post


Link to post

Hi @Angribob, when the premium is in:

- points - of the bet size (eg. 3pts premium is 3  X £10 per point = £30)

- percentage - of the bet size X price (eg. 0.3% premium is 0.3% X £ 10 per point X £ 1000 price = £30)

Also please note that the premium is paid only if the stop is triggered

I hope this helps. 

 

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Member Statistics

    • Total Topics
      11,921
    • Total Posts
      60,341
    • Total Members
      80,306
    Newest Member
    DonCan
    Joined 10/08/20 11:30
  • Posts

    • Integrate v.11 of PRT with IG. Why are IG still using PRT v.10.3, when v11. which contains many significant improvements, was released over a year ago?
    • 1 last post - couldn't help myself!!! Simple 1 x 1 Gann Angles projected from the high/low price points - I'll admit that this is ultra advanced trading stuff here, the message here is two-fold The markets regardless of what you think or have been told are NOT random, they HAVE no choice but to work out a pre-set course according to their growth or decay Gann Angles are far far better at identifying support/resistance levels - BECAUSE the market or specifically price action is NOT 2D, we can clearly see price conforms to a grid system movement - that ain't 2Dimensional! You could blindly trade those gann angles if you have the right level of expertise and knowledge of them - look at the blue circles - price rallied then fell back to them and bounced pretty accurately, they won't all work and the highest swing high is under threat at which you can't project further levels from Again here's the secret of success - you could of skewed the R value into your favour by having a 20/25pt stop underneath, trailed a stop and made fantastic R value returns Gann said over 100 years ago "Markets are financial points of force and that EVERY low/high is connected to another low/high point of force in the FUTURE, as well as in the past" As you can clearly SEE - he was absolutely right - very few people look at the markets right, when you do you see things completely differently to most other traders/investors There's some real science behind markets moves - I might do a post in future months as understanding what is actually going on helps you see through the fog and makes things a bit clearer  I'll admit I've studied Gann for years and it is not easy, it is very hard to grasp - he hides hidden messages in his course that can throw you off for months and when you to apply his methods some just do not work
    • Indeed🤓
×
×