RE: Day Traders - Bottom Trawlers - ROCE9 Nov 2020 23:25
ROCE - Return on Capital Employed....
Looking at Trades....
On 03November a couple of big(ish) trades (Buys) went through....
03-Nov-20 14:02:18 200,000 at 2.30p Buy* £4,600
03-Nov-20 15:58:48 150,000 at 2.29 Buy* £3,435
Today 09November three big(ish0 trades (Sells) went through....
09-Nov-20 14:46:36 275,988 at 2.4255p. Sell* £6,694
09-Nov-20 11:19:38 150,302 at 2.4336p Sell* £3,658
09-Nov-20 08:38:26 278,354 at 2.4255p Sell* £6,751
Assuming the original buyers DID recoup 0.1255p (before brokerage) on their 06November purchases....
They had an ROCE in 4 trading days.....
The 200,000 Buyer "could" have got out with £251 profit for 4 days - working his/her Capital = 5.45% ROCE
And the 150,000 Buyer "could" have got out with £188 profit for 4 days - working his/her Capital = 5.48% ROCE
There are approx 260 UK Trading days per annum (365days less w/ends and public holidays).
So they/you could rinse and repeat these trades - successfully but unlikely !! - every four days over 260 Trading days...
Their ROCE - before brokerage - on £4600 Capital Employed would/could become 65 x 5.45% (£16,315)
Explains why Mega£million funds armed with algorithms can make a killing from day trading minute by minute....
PI's tend to be long term holders waiting for multibaggers - sometimes for years......
Unless you were in Gulf Keystone Petroleum, Xcite Energy or even Petro Matad when Brent Crude hit $100/bbl. !!
Grain & Commodity Shippers (Shippers not Miners/Producers) can turn over their Capital circa 40x in a season with nice fat ROCE p.a.....
GL - DYOR - Oilf.
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