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casapinos, it depends how you short.
If you short CFDs via DMA, the provider has hedged the risk to market. They make their money on commission and overnight fees (currently I think 2.5% - LIBOR). I don't think it matters to them if you win or lose. In fact, they'd probably prefer you to win so you remain a client and you'll be a better credit risk. Incidentally, when interests rates are higher it's quite amusing to have overnight interest credited to your account on short positions!
I don't really see a difference between someone buying the stock and hoping to profit from a rising price and someone shorting hoping to profit from a falling price. Sure, you have to be careful not to over extend when trading on margin, particularly when you're a pro client without the account loss protection. Even so, I don't think it's the 'rocket science' you portray. I don’t have a maths PhD and I've been doing it for almost 20 years (initially with GNI) and never got into any silly scrapes with margin calls.
I Was thinking over the next few years and there is a chance vaccine will come out next year which will push most travel stocks back up.
But short term most people think will lower. Which right would be great. I'm not sure if will hit the RI price. Seems too low
Casapinos, thanks but it's still not clear to me. Suddenly (without a corresponding rise in the RR SP) the 3srr dropped from 47 to 16 (with a period of non-trading). I mean it does not mathematically relate to the inverse of 3 x rise in RR.
The creativity of short sellers who are 5000 percent down to justify themself is groundbreaking, you should be writing books you’ll sure make more money than stock market.
Yes, right, from 8am for about 5 hours the 3srr PERFECTLY tracked the RR share, then suddenly all the investors decided it messed up the track and it’s 75 percent down but “don’t worry” (face palm)
What really happened- investors realized this is going one way- up and they better sell now because this will be 0.001 very soon
This price change is a permanent one.. So the halved loses are real.. And can get compounded if RR, share price goes up.. That's the risk with shorts. Suggest everyone see if RR drops over the coming days to level out.. Some people think RR is now a good investment. Which it is long term.. But short term if price goes down then there is a chance short price will reach the pre f*** up level.
I guess, 3SRR is tracking main RR and RRN hence why the loses are doubled up on loses (means 6 times 2*3X). It will be interesting if 3SRR will behave same if RR and RRN going down tomorrow.
Addendum people should recognise that leveraged shorts are a synthetic construct designed by those who offer them to make money , BUT NOT FOR PUNTERS.
I have a feeling I should have bought into 3SRR while it was at 16
Yeah, they will correct it when you sell. They are waiting for huge sellers to go before taking it back up. lol
Wile not really as shorting is not my thing , but the components of the fall are the direct effect of the Notional RR rise today ie the AERP , that is the Actual ex rights price which was approx. 75p at the open so the SP is up around 13-14% and thus 3SRR is down 3x that, ie around 40-42% , plus the effects of compounding which I don't really understand but is described in my source as "negatively impacting returns when the markets are more volatile" and today surely qualifies!
TBH leveraged shorts are for gamblers not investors and for gamblers with a maths doctorate , I hazard a guess than few here are that qualified.
Casa.. That doesn't explain sudden drop to - 76 when the 3x long RR is showing a 40% rise..
GraniteShares track performance no? RR up up approx 13% from todays open which gives it an approx 40% rise as reflected in 3LRR.
3SRR was correct up until it dropped from 50 to 16
lol, They do whatever they want. I expected it at 8 am then it happen at 11.35 ish then now
Ok.. Unless RR starts going over 90.. Then looking at losses.
I thought they worked out the prices before opening this morning..
The 3 x long is at +38% so shorts Should be - 38%
No reason should suddenly double the percentage near end of trading day to - 76%
TERP = ( (10 x 32p) + (3 x 61.7p) ) / 13 = 38.85p
38.85p was what I calculated for the 3xSRR yesterday but since it moves 3x when RR moves 1x divide 38.85 by 3 = 12.95p was price it hit 12.9p on IG
Casapinos, can you explain the sudden drop from 46 to 16?
So why is Long not up 70%?
3SRR seems Ok to me, it is showing down ~70% that's 3x the notional rise in RR today plus the effect of compounding and decay , but you all know that don't you!
You are not on margin trade like CFD so there is nothing to be afraid of but just sit on your hands and wait.
Granite shares is still calculating the right issues pro rata to the 3xSRR and 3x LRR. Therefore when they are satisfied that the right price and percentages are done. Until then they will have more auctions to discover price.
Mann123. I'm confused.. It normally follows RR its suddenly halved. Is it going back up and correcting or best to get out if RR starts going north (
I haven't sold but don't understand what people mean on average 25 im new to this
Is this going back to 50? I was initially in at 26, it then doubled my money when it went to 52 so I pulled out in case it jumped again.
Why is it at 16? rest of the chart mirrors 3LRR more or less, except for this bit
My average is 25 and the weekly short chart 3x SRR is not due to start until 2nd Nov. next week. It has not closed yet in stocsRsi
Will it correct itself and go back to where it was?