Trading Trail #9: Home and Away
Nov 10, 2011 at 5:15 pm in Trading Diary by
Today’s spread betting commentary comprises two halves: what has happened at home, and what has happened away.
Home
The ‘Home’ part of my headline refers to the fact that my Homeserve position was up by almost £30 at the open this morning, so I seized the initiative and guaranteed my stop order at the better-than-break-even price of 217p for a cost of £1.06. It means that my last purchase at 211.40p will definitely close in profit now, even if I factor in the cost of the guarantee.
Also at home…
Yesterday’s opening order on Cape executed at 315p and moved immediately into profit allowing me to trail my stop order to better-than-break-even at 317p, but sadly not allowing me to guarantee it at that level.
I bought into Centaur Media at 37.6p, £1-per-point as usual and with a stop order at 28p. Pace came off the Stop-Out List – last stopped out at 67p, re-bought today at 62.8p. UK Coal entered the portfolio at 33.6p.
Aviva stopped out at 297.1p at the open, and of course then went back up, but I reckon it has further to fall and I’ll live to re-enter another day.
I finally gave in and bought Admiral at 828p. I don’t like it one bit that I’ve bought something so expensive, so I’ve paid £4.14 to guarantee my stop order as close as possible at 788.5p. Whereas I can afford a loss of £40 (if I really have to) at this level, I couldn’t afford the prospect of it gapping down 50% overnight and losing me £400. I’ll be trailing this stop order as fast as I can to a more reasonable level, and it’s a pity I can’t do so automatically.
Away
The ‘Away’ part of my headline refers to the fact that I established a few foreign positions today, so that you don’t get bored of all these UK equities. While I aim to educate and entertain you here, I’m also running this spread bet portfolio to hopefully make some money, so I need to be careful…especially so with these pesky foreign shares.
They’re pesky because it is not always obvious on the trading platform that if you buy into Commerzbank (Germany) at 1.51p, like I have, you are effectively buying in at 151p. This is apparent below, where a 0.03-point spread creates an immediate £3 loss rather than a £0.03 loss.
The result of this is that I have to look for very low priced foreign shares in order to stay within my money management criteria. So also in came Aminex (Ireland) at 0.06p, Renewable Energy Corp (Norway) at 5.3p, and Technicolor (France) at 1.29p. Then I averaged down on technicolor at 1.23p…which is a little risky.
IMPORTANT NOTE: None of the stocks mentioned in this article are recommendations!
Portfolio Value
During the past two-day turmoil the portfolio value dipped to as low as £900, but at close of play today it’s back up to a more healthy £958.15. Remember that it should be lower than this merely as a result of the spreads on the numerous positions that have been opened.
Tony Loton is a private trader, and author of the book “Position Trading” (Second Edition) published by LOTONtech.