Shorted oil at $125

killadoob said:
what about all the okes that bought oil when it was at 140 dolla

surely they have lost so much money

how can u be "making" money if oil gets cheaper

or am i being stupid?:)
Click to expand...

Its called a short position. You make money when the market goes down. Money is made in both directions killa...

Long on oil means you expect the price to increase.
Shorting oil means you expect the price to decrease.
Money can be made in both circumstances...
 
captainwifi said:
Yes, I trade myself in real-time. I closed out the trade at $124,70.
The trades I post in real-time here:

http://scratchpad.wikia.com/wiki/Tradingfutures100

Wikia logs the exact time that one makes a post thus you can go and check to see if my trading claims are truthful or not - I can't fake the results.

Oil is now at $124,50 thus you would have made a 50 point profit if you had followed my real-time short sale.
The beauty about spread betting is that anybody can do it with as little as R200.
Click to expand...

Really? Isn't the whole point of a wiki so that anyone can edit it? Need some proof? Click the link.

*edit* the page that cannot be faked has been changed back. How amazing!
 
Last edited:
killadoob said:
what about all the okes that bought oil when it was at 140 dolla

surely they have lost so much money

how can u be "making" money if oil gets cheaper

or am i being stupid?:)
Click to expand...

Basically, you are betting against someone else that the price is going up/down. It is a zero sum game, meaning that for every winner, their is a loser.

On the futures market you buy/sell something now, for delivery at some date in the future.

Lets say the oil price today is also $100/barrel.

Example 1 (profit):
I sell an oil futures contract for $100. If the oil price moves to $80, I only need to give the buyer $80 worth of oil for the $100 he paid me, so I've made $20.

Example 2 (loss):
Someone is sold me an oil futures contract for $100. If the oil price moves to $80, I can only sell the contract for $80, so I've lost $20.

This is very useful for companies like airlines. It allows them to hedge themselves against a rise in the fuel price. So at the time of you buying your ticket, they buy an oil futures contract betting that the price will rise. If the price falls, they loose on the contract but they are able to buy the fuel at a cheaper price. If the price increases, they make money on the contract, which they can use to offset the increased cost of the fuel.
 
Oil hit a low of $122,50 from the levels of my post at $125 - 250 point profit. If you only traded with R1 for a R200 margin outlay you would have made R250. Or put it this way you risked your margin of R200 to make R250. The margin amount is where gt247 will stop-loss your position for you.
 
Shorted oil again now at 124.67.

anybody else short ?

future should decline within next 10minutes, otherwise I stoploss.
 
Last edited:
surely this type of trading is riskier than 1:1 trading? if ur profits get multiplied then surely your losses will aswell?
 
Raevinn said:
surely this type of trading is riskier than 1:1 trading? if ur profits get multiplied then surely your losses will aswell?
Click to expand...

Yip, most certainly. A CFD for instance is a leveraged product so your losses can be far more than the invested amount.
 
captainwifi said:
Shorted oil again now at 124.67.

anybody else short ?

future should decline within next 10minutes, otherwise I stoploss.
Click to expand...

Oil peaked about 40mins after this post at $125.15, thus the drawdown was only
48 points or 0,4% which is extremely accurate. Thus you risked 48 points to make a profit of 201 points at $122,66 where oil bottomed today.

Stoplossing is each person's choice, some would only stop loss at $1 above where they entered the trade. I consider this thus to be my second winning trade in two days. Imagine if one could manage to make these trades every day!
 
Captain ... what good reads on the net or books that i can look into to learn the basics regarding trading and spread betting and the like? ... at the moment all this is pretty greek to me :) ... will appreciate the help :)
 
adamr said:
thanks you!!!!!

EDIT: i have checked online, are there no local retailers that have this book in stock????
Click to expand...

I don't know. I havent read it, just came across it. Have you tried Amazon?
 
On the FSX (fantasy stock exchange) game on facebook I shorted apple at $178, they're on 155 now :D 12.8% gain in a month, if only I really had the 100mill to work with :D
 
reading online abit, will check tomorrow for th book. Using captains oil stock as an example, if i short oil at $125, and if oil drops to something ridiculous like $50 and i decide ok thats it time to cash in, is my profit always guaranteed in a short cause logic says someone has bought it from me at $125 where i paid $50, so am i correct to say a short profit is always guaranteed? And can the same be said if i went long? . . . say the offer price was $127, and the price now rose to something crazy like $190, will i always have a buyer no matter the level in a long position? I am thinking not... School me
 
raevinn maybe its time to go long on apple :) . . . The thing is with cfd is if you study a particular share so well to a point where you can predict the charts to a degree you should do pretty good . . . Am i right in saying this? Cause thing is you can make money on the up and down
 
adamr said:
reading online abit, will check tomorrow for th book. Using captains oil stock as an example, if i short oil at $125, and if oil drops to something ridiculous like $50 and i decide ok thats it time to cash in, is my profit always guaranteed in a short cause logic says someone has bought it from me at $125 where i paid $50, so am i correct to say a short profit is always guaranteed? And can the same be said if i went long? . . . say the offer price was $127, and the price now rose to something crazy like $190, will i always have a buyer no matter the level in a long position? I am thinking not... School me
Click to expand...

The counterparty risk will be with your broker, so you will be able to make money out of any movement in the market. Derivatives are also used as a hedge against an actual equity investment as well.

Example:

I invest in stock A trading at R100. I buy 100 shares for R10k. I am exposed to a potential downside of R10k, but my upside is unlimited. Therefore I want to hedge against the downside. So...

I purchase short contracts with a 10% margin and 10% gearing meaning my cost of exposure or cost to purchase the contracts is R100, yet my nominal exposure is R10k. So it has cost me R100 to hedge against the market turning against my downside.

You can also make plenty money out of these investment instruments, but be very, very wary. If you choose to try and make money out of the market, you could lose what you don't have. That is why it is called a leveraged product - leveraged being a loan from the bank/broker...
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X