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It doesn't mean they will go up but means that Spreadex believe that the sentiment of traders will be net long and therefore to ensure cover for these bets they have taken a long position themselves.
its a god thing imo.
exactly bananaman.i think it is very positive indeed' in that it indicates the sentiment trend amongst a large (largish?) number of people. it must be a reasonable number i think as otherwise they would simply absorb the risk with the spreads..doesnt mean its going to go up in practice, but sentiment is good.
So essentially spreadex have hedged against investors and traders placing long bets on VAL by buying the shares directly.
This because they would usually cancel out a buy trade with a sell trade and have a net zero position simply making money on the spread.
As spreadex are anticipating more long bets than short sells they cannot cancel the longs with shorts so have taken a long position themselves to make money from the overriding direction of the SP.
So you could in effect say that Spreadex buying VAL shares is very positive.
OK, going to admit to being clueless. Is it a good thing or a bad thing to have this spread betting company as a shareholder? I would have assumed a good thing as any holder does not want the value of thier investment to go down, but perhaps I just don't get it?
https://www.financial-spread-betting.com/Spread-betting-hedge.html plenty f comment and information here.not sure how recent it is but quite interesting.
I still sense another tick up or two.....our time is nigh
So true rightback......so true
Well the buyers are trying today.
Hoping for another tick up before close.
I dern’t say rise into the close (Freddie) it then good the opposite way.
Are we still trying to clear the overhang? if so this will fly once that clears.
Thanks for that S-T. Never used spread betting so never had to look into what it was or how it works but always wondered. That post has explained everything in laymans terms. cheers bud. ATB
Cheers Saint.
Apologies i have my thoughts the wrong way round, if someone has bet long on their platform then they will likely BUY in the market to hedge the amount the individual can win with the bet. So this actually tells me that someone is buying a chunk via spread bet. I'm not aware of SB companies taking prop positions in the expectation of good news.
Would it it effect the SP if say a few spread bet companies held say half the shares in issue !
Sorry but i'm not sure you understand the model. A spread bet does not affect the share price of as it is a contract between yourself and the spread betting provider. ... However, the fact is that if a spread betting firm doesn't hedge your bet in the wider market, then they stand to win when you lose and lose when you win. This is the company hedging the positions on their platform.
So you are saying you think SB platforms take positions in all micro caps in case they blow up with good news? That's just not credible.
Good advice ST....and I've taken it!
Must be buying a position to offset the shorts on their platform? that's quite a short position if so. Good news on 201 or anything else could crush them.