[Netting of on multiple trades]

Dear All

Scenario: At 10 am I open a £3 trade to go long. I then place 6 net-off sell trades in the order book. The sell trades are 25 points apart and each net-of trade is 50p. The long trade opened at 5000, and the net-off sell trades in the order book are at: 4975, 4950, 4925, 4900, 4875 and 4850.

At 11 am I open another £3 trade to go long. I then place 6 net-off sell trades in the order book. The sell trades are 25 points apart and each net-of trade is 50p. The long trade opened at 5200, and the net-off sell trades in the order book are at: 5175, 5150, 5125, 5100, 5075 and 5050.

At 11:30 the market price comes down from 5200 to 5145. As a consequence, 2 net-off sell trades execute. As the the net-off sell trades are 50p each, the total amount netted off is £1.

Which long position has £1 netted-off against it; the £3 trade at 5000, the £3 trade at 5200, or 50p is netted off both?

 

I  look forward to reading your replies.

 

Thanks

 

C

[FTSE100 - Daily Trades]

Hi

From experience I can give the following suggestions:

• Long Positions are good because the FTSE will never hit zero but has (in theory) unlimited upside.
• Allow for a big margin to absorb volatility. IG allow for 50p trades so if you don't have thousands on your account, consider smaller trade sizes
• Long Positions are good because you can scoop up easy points when the FTSE goes ex-dividend every Wednesday and this will off-set fees charged for positions held overnight.
• Keep an eye on price movement ranges and support/resistance levels as you may get caught behind a major level of resistance.
• Every time you close a position in loss, you reduce your account size which inhibits your ability to trade (see point 2).

Hope this helps?

 

All the best