Robbie Burns’ Trading Diary
For example, in the first week of August last year I put what I thought were very short term FTSE bets but the market simply kept falling and over a week or so I got 500 points my way!
Another that appealed was Kentz in the 380s, and Fenner in the low 400s also looks appealing. After all, it’s odd to think that when shares crash down that people often don’t buy. But it’s like the sales isn’t it?
Trailing stops can help with FTSE bets, though setting them too close to your entry is usually a bad move and will just spike you out on natural variability.
One thing to watch during extreme volatility is to check your exposure to leverage.
I used to short individual companies in downturns, but these days I find it easier to just use the FTSE. I’m also using the current downturn to pick up spreadbets on a longer-term basis (say June/Sep expiry) in companies that look to have been oversold. For example, picking up Costain at just over 200p looks like a bargain to me, with the aim of picking up around 30 points riding it up to 235, perhaps even more in time.
At the risk of being a boring old fart, (You boring old fart! — Editor) which is quite a risk here for a magazine which enjoys a bit of risk... make sure you can afford to cover losses. What you don’t want is a spreadbet firm calling you up demanding money. Make sure you are not in over your head. Have a great June! At least there won’t be any more “Should you sell in May and come back on St Ledgers Day” features… Robbie
June 2012 | www.financial-spread-betting.com | 45