Member Info for ELSteve

Agreed, although I am bullish on Vod long term the last few trading sessions do look like an over extension so I've cut half today and will let results digest before re entering

Don't you mean Statler and Waldorf !

Can we please stop some of the baseless accusations that are being voiced on this site. If you have firm evidence of any illegal practices then report them to the FCA or SFO. Anyone posting on BB's have a duty of care in what they state, if in doubt look at the rules surrounding dissemination issued by the FCA.

Garonne it sounds like your emotions are getting in the way of your trading. If you become unhappy with your investment or your analysis has changed your original decision then you need to stop yourself out. Don't forget opportunity cost, rather than your money being in an investment you don't like it could be somewhere else with a better return potential.

Then please go and philosophise somewhere else

No one cares what you think, putting words together does not equate to a coherent sentence. Please either get the medication to the correct dose or better still spare us your continual drivel

This happens every 3rd Friday of every month, it's FTSE Option expiration and every constituent stock goes through an auction process to determine the EDSP.

The phone trading only was because the stock went into auction as it's 3rd friday option expiry and EZJ is a FTSE 100 constituent

I sold most of my holding pre results around the 563 level and am looking to get back in at some stage but several things concern me on a technical level. The Gravestone Doji on 23rd, the inability of the share price to break the upside resistance or to hold on to the intra day gains , plus shorts increasing recently. From a trading point of view I'm going to sit and see what happens in the short term and wait for a better entry point. AIMO

There has been no real pick up in volume during the sell off which is what I would normally expect to see during a forced liquidation or a panic sell. I certainly would not want a large unhedged position so although I am not speculating that this is the definitive answer experience suggests it is a more rational reason than others that have been suggested here.

Another possibility is that a certain person may be delta hedging their short put position and if any of you have tried doing that in a thin market then you'll know how tough that is.

If you want to it's your choice

Tony

I also said that "the purpose of my posting is to try and clarify to who's interested exactly how the hedging process works"

I am not and never was an accountant so the fact your spreadsheet mirrors the accounts and you then share that with this board is very useful and informative.

I was a Derivatives broker so my expertise is in the trading and hedging part of the process and hopefully I have managed to explain how this works.

Tony

If you enter into an exchange traded product and your hedges go offside then you will receive a margin call from said exchange so will have to pay this as the product is marked to market daily so in accountancy terms you are making a loss.

However using the previous example we could sell futures at $70 and the EDSP is $80 so technically we have lost $10 on the hedge but because the EDSP is $10 higher then the hedge has done what it was put on to do which was to sell the oil at $70. I appreciate that many PI's don't understand how hedging works however I have been involved in derivatives for around 25 years so I do know what I am talking about.

Thirdly you suggest that selling oil at $70 when spot is $80 is considered a loss and at this point you need to question whether we do need to put on hedges at all or just sell into the market at spot and suffer the volatility as a consequence, I know there are arguments for both positions but personally I would like to see around 50% hedged for some certainty but that's just me thinking and I'm sure others would argue differently.

You also say that the NOI is based on the spot and not the hedged price however that is an issue for the i3 accounts department to clarify, the purpose of my posting is to try and clarify to who's interested exactly how the hedging process works

To put it simply you correctly say that the profit or loss on the hedge is irrelevant. This is because i3 is an oil producer so all we do is suck it out the ground and sell it to market, the hedge only dictates the price that it is sold at.

If we put on a $70 hedge and oil goes to $80 then the hedge being marked to market will show a $10 loss however all that's happened is that we have sold the oil for $70 and missed out on selling it at $80 hence a technical loss on the hedge that doesn't actually exist because we have agreed to sell at $70.

Spike.

Might even be a Market Maker picking up cheap Gamma !

Posted by the NOB of the day, actually make that GTC !

As they say " Buy the rumour and sell the fact"

All derivatives have an expiration date and as MA has sold put options the result is that if the stock price is below the strike price on expiry date the he has to purchase the stock at the strike price, if the sock is above the strike price then the options expire worthless.

Some chart patterns, for example Head and Shoulders or 3 White Soldiers, can be considered Bullish or Bearish and the more obvious they are the more chartists and Algo's notice the signal and trade accordingly making the patterns self fulfilling.