e mërkurë, 13 qershor 2007

CFD Trading Investment - 10 % down

With the banks coming under pressure this week I have a couple of shares I bought 2 weeks ago that have been hammered. The Investec stock I bought has dropped by 10%, a huge drop when I am trying to make between 2-3%. What does this mean? Ok, if I put R1000 rand as a margin into the stock, the daily profit or loss (in this case a loss) has dropped to equal my margin amount i.e. R1000. Is this a train smash? Well not really, as I have only got 10% of my entire trading float in this share, so I can afford to hold it (for 2 months if necessary) until the stock recovers. It may not recover fully, but I have a chance of recovery whereas if I had a stop loss in place I would be out of the stock, with no chance of recovering my loss. I am only doing this because I have a very small amount invested in the stock, and won't lose my shirt on the trade.

This is how the trade went. I bought the share for 9800, putting a 2% take profit onto the trade, and no stop loss. The share started dropping as soon as I bought it (typical!) If I had put a 3% stock loss I would have sold the stock when it plummeted through 9506 . It keep up it's free fall, right to 9000. I was reeling, over 10% down. But I hung in and slowly it's started a recovery. I am hoping that it will get back to my buying price, and then I'll get out.

The only question is ...can I employ that capital better somewhere else and make up the losses faster??

1 koment:

Unknown tha...

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