Archive for stock trading online

Financial Spread Betting Market Rollover

Sunday, February 22nd, 2009

Hi Anna. For financial spread betting, if I choose to let my daily market bet roll over to the next day, will I incur any cost other than the “relative funding rate”, even if the stock price is unchanged? What I am worried about is that I will also be charged for half the spread. Example: say the stock quote is 100 – 105 and I choose to buy at 105. If the stock price doesn’t change at the end of the day (and I let it rollover) then will I also be charged the 2.5 points between the mid price and buy price? Hope this makes sense! Thanks, Mark

How Stock Markets Work

Sunday, February 22nd, 2009

Anna, I was interested to read your piece on how markets work. The ‘nuts and bolts’ always seem to be skirted over or assumed in other accounts I’ve read, but I’ve always been a bit unsure as to how the price mechanism works. For every seller there must be a buyer, and I couldn’t understand how, in a rapidly falling market, it would always be possible to find a buyer – meaning prices must fall much aster than it appears. If, for instance I have some HBOS shares at £5 and there’s sudden panic – why would someone buy them from me at £4, £3 or £2 . But it seems when markets are falling fast, you can always sell at any point on the way down. I probably haven’t explained that very well, because I’m still a bit bemused by the process! I’d be grateful for a guide to any books or articles that go into this kind of rudimentary ‘idiot’s guide’. Yours, Charlie

Risk & Money Management

Sunday, February 22nd, 2009

Hi Anna, I am Fernando from Sydney, Australia. I only started to get into the trading stuff. While I was researching on risk management I came across your site. Thank you and great stuff!! Congratulations!! My question is about the 1% risk per trade rule. In your examples you are not considering fees or taxes. However if I have a capital for trading of 50000$ each trade should be of 500$ but the broker alone charges 20$. I have researched and that is the lowest I could get. Therefore Every time I trade I do I am loosing 40$ (20$ to buy and 20$ to sell, more if I start shorting). Only to get back the fees I need to earn 10% per trade if I only risk 500$. Do you have any comments on that? Thank you for the help Regards.