Master Yoda
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Also it will be kind of evidence for the broker that you are a satisfied trader after all
Resolved - failed to withdrawl and scalping warning in plus500
- Thread starter leroy_0222
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- resolved issue plus500
Also it will be kind of evidence for the broker that you are a satisfied trader after all
leroy_0222
Private, 1st Class
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- 47
Contract for Differences - MoneySENSE
Is short selling allowed?
Various restrictions apply to short selling in the stock markets. CFDs, however, allow you to take short positions, without having to first own the underlying shares. But taking short positions can be very risky and can potentially lead to unlimited losses.
Example 7
Suppose Mr A expects the shares of XYZ Ltd, quoted at $2.00, to fall. He can sell 2000 shares at $2.00, as a CFD. The initial outlay to open the position will be $400 (10% x $2.00 x 2000).
After 7 days, the shares of XYZ Ltd are quoted at $1.95. Mr A decides to close the position by buying 2000 shares at $1.95 as a CFD. The profit made will be $100 [2000 x ($2.00 - $1.95)] or 25% ROI, although the actual amount received will be less once transaction and other costs are deducted.
However, if his view had turned out to be wrong and the price had moved in the opposite direction by $0.05, the investor would have incurred a loss of $100 or -25% ROI. In this case, the amount he has to pay the CFD provider will be $100 plus transaction and other costs.
If his view had turned out to be very wrong and the price had moved up by $0.20, the investor’s loss would be $400 [2000 x ($2.00 - $2.20)] or -100% ROI. In this situation, he would have lost his entire initial investment of $400. Any further gain in price beyond $2.20 would result in further losses to the investor. In other words, he faces unlimited losses in this scenario.
singapore also allow short selling with CFDs.
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CFDs: short trade example - London Stock Exchange
CFDS: SHORT TRADE EXAMPLE
Let’s consider share A of Ftse100 quoting at 210p to 210,25p today.
One year ago you bought share A for 10% weight of your equity portfolio at 110p.
If there are no trading commissions, no taxes and no dividends, in one year time your profit for share A is equal to the % price increase weighted for portfolio weight, or [(210p-110p)/110p]* 100 = +9% (rounded and weighted for 10% positioning).
Today you feel nervous about share A because of bad financial news that can cause a price drop, that you are forecasting in 10%, in the very short time (let’s say by next week end).
Unfortunately you haven’t reached your investment time horizon and so you don’t want to sell a portion of the share A because you don’t know if the forecast is correct and so you don’t like to face the risk to watch an unexpected rally with a decreased share A portfolio’s weight.
But if you are right about the forecasted downtrend for share A, using a passive portfolio management, you will suffer a 10% drop for the cumulated profit.
The risk is that this drop doesn’t stop in the 10% scenario and so you could lose more of the cumulated profits for share A.
Shares A fundamentals are strong and you don’t want to take profit now also because you don’t see good investment alternatives around.
What can you do to protect (to hedge) share A profits?
You can sell share A CFD investing just a portion of your portfolio liquidity: if you are long 1000 shares A, representing 10% of your equity portfolio, you can sell 1000 share A CFD at 210p (remind that share A price is quoting 210p-210,25p today).
Initial margin required is 10% and so you can invest just £210 tosell a total value amount of share A Cfd of £2.100.
If share A price is quoting 210p-210,25p today, you can sell 1000 CFDs (representing a sale for a total value of: p210 * 1000 = £2.100) paying just the initial margin of 10% and so: £2.100*0,10 = £210.
If after 1 week (your forecast was correct) share A price is lower than p210, let’s say 10% lower or 189p, also share A CFD will be lower.
You decides that share A 10% drop is enough and so you want to close the hedging.
CFDs like stocks can be bought or sold at anytime during the trading day ( when the underlying market is open) and so you decide to close the CFD position today.
If you sold 1000 share A CFD, to close out the position you have to buy back 1000 share A CFD.
If today share A CFD price is p189 – p189,50, you buy back 1000 share A CFD paying p189,50.(*)
Paying p189,50 * 1000 = £1.890,5 you are able to close out share A CFD position.
Summarizing, you invested £210 to participate to the potential profit from shares A drop, investing short in share A CFD, or selling 1000 share A CFD and you gained: £2.100 - £1.890,50 = £209,50.
CFD profit helps you to stabilize share A portfolio cumulated profit, without modifying share A portfolio weight.
Using CFDs you are in the condition not only to monitor the equity risk but also to balance your portfolio risk, hedging against possible equity drops, using just a small portion of your liquidity.
(*) Share A CFD p189-p189,50 represents the CFD trading quotes where p189 is the ‘bid’ (where CFD provider buys CFDs ) and p189,50 is the ‘offer’( where CFD provider sells CFDs). When you buy back CFDs, CFDs provider is selling to you and so you have to hit the offer price at p189,50.
UK london also allow short trading. Why plus500 can void all disadvantage of trading position for them just because the scalping?
Is short selling allowed?
Various restrictions apply to short selling in the stock markets. CFDs, however, allow you to take short positions, without having to first own the underlying shares. But taking short positions can be very risky and can potentially lead to unlimited losses.
Example 7
Suppose Mr A expects the shares of XYZ Ltd, quoted at $2.00, to fall. He can sell 2000 shares at $2.00, as a CFD. The initial outlay to open the position will be $400 (10% x $2.00 x 2000).
After 7 days, the shares of XYZ Ltd are quoted at $1.95. Mr A decides to close the position by buying 2000 shares at $1.95 as a CFD. The profit made will be $100 [2000 x ($2.00 - $1.95)] or 25% ROI, although the actual amount received will be less once transaction and other costs are deducted.
However, if his view had turned out to be wrong and the price had moved in the opposite direction by $0.05, the investor would have incurred a loss of $100 or -25% ROI. In this case, the amount he has to pay the CFD provider will be $100 plus transaction and other costs.
If his view had turned out to be very wrong and the price had moved up by $0.20, the investor’s loss would be $400 [2000 x ($2.00 - $2.20)] or -100% ROI. In this situation, he would have lost his entire initial investment of $400. Any further gain in price beyond $2.20 would result in further losses to the investor. In other words, he faces unlimited losses in this scenario.
singapore also allow short selling with CFDs.
------------------------------------------------------------------------------------------------------------------------------------------------
CFDs: short trade example - London Stock Exchange
CFDS: SHORT TRADE EXAMPLE
Let’s consider share A of Ftse100 quoting at 210p to 210,25p today.
One year ago you bought share A for 10% weight of your equity portfolio at 110p.
If there are no trading commissions, no taxes and no dividends, in one year time your profit for share A is equal to the % price increase weighted for portfolio weight, or [(210p-110p)/110p]* 100 = +9% (rounded and weighted for 10% positioning).
Today you feel nervous about share A because of bad financial news that can cause a price drop, that you are forecasting in 10%, in the very short time (let’s say by next week end).
Unfortunately you haven’t reached your investment time horizon and so you don’t want to sell a portion of the share A because you don’t know if the forecast is correct and so you don’t like to face the risk to watch an unexpected rally with a decreased share A portfolio’s weight.
But if you are right about the forecasted downtrend for share A, using a passive portfolio management, you will suffer a 10% drop for the cumulated profit.
The risk is that this drop doesn’t stop in the 10% scenario and so you could lose more of the cumulated profits for share A.
Shares A fundamentals are strong and you don’t want to take profit now also because you don’t see good investment alternatives around.
What can you do to protect (to hedge) share A profits?
You can sell share A CFD investing just a portion of your portfolio liquidity: if you are long 1000 shares A, representing 10% of your equity portfolio, you can sell 1000 share A CFD at 210p (remind that share A price is quoting 210p-210,25p today).
Initial margin required is 10% and so you can invest just £210 tosell a total value amount of share A Cfd of £2.100.
If share A price is quoting 210p-210,25p today, you can sell 1000 CFDs (representing a sale for a total value of: p210 * 1000 = £2.100) paying just the initial margin of 10% and so: £2.100*0,10 = £210.
If after 1 week (your forecast was correct) share A price is lower than p210, let’s say 10% lower or 189p, also share A CFD will be lower.
You decides that share A 10% drop is enough and so you want to close the hedging.
CFDs like stocks can be bought or sold at anytime during the trading day ( when the underlying market is open) and so you decide to close the CFD position today.
If you sold 1000 share A CFD, to close out the position you have to buy back 1000 share A CFD.
If today share A CFD price is p189 – p189,50, you buy back 1000 share A CFD paying p189,50.(*)
Paying p189,50 * 1000 = £1.890,5 you are able to close out share A CFD position.
Summarizing, you invested £210 to participate to the potential profit from shares A drop, investing short in share A CFD, or selling 1000 share A CFD and you gained: £2.100 - £1.890,50 = £209,50.
CFD profit helps you to stabilize share A portfolio cumulated profit, without modifying share A portfolio weight.
Using CFDs you are in the condition not only to monitor the equity risk but also to balance your portfolio risk, hedging against possible equity drops, using just a small portion of your liquidity.
(*) Share A CFD p189-p189,50 represents the CFD trading quotes where p189 is the ‘bid’ (where CFD provider buys CFDs ) and p189,50 is the ‘offer’( where CFD provider sells CFDs). When you buy back CFDs, CFDs provider is selling to you and so you have to hit the offer price at p189,50.
UK london also allow short trading. Why plus500 can void all disadvantage of trading position for them just because the scalping?
Master Yoda
Captain
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Then open your own thread and let's see how we can help you
leroy_0222
Private, 1st Class
- Messages
- 47
i have already opened the case on the FPA court case
Pharaoh
Brigadier General
- Messages
- 20,314
Unfortunately, it looks like AsstModerator disqualified the case. The trades aren't forex, so don't qualify.
Going after them with the UK FOS is well worth exploring. AsstMod also posted another suggestion in your case thread.
Filing a complaint with econsumer.gov - Your site for cross-border complaints. can also be useful. The report will be available to police and regulators worldwide.
Going after them with the UK FOS is well worth exploring. AsstMod also posted another suggestion in your case thread.
Filing a complaint with econsumer.gov - Your site for cross-border complaints. can also be useful. The report will be available to police and regulators worldwide.
Master Yoda
Captain
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leroy_0222
Private, 1st Class
- Messages
- 47
because almost all my trades on plus500 is trading stocks so it doesn't qualify
Master Yoda
Captain
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Asstmod, if you trade stocks or commodeties through FX broker it doesn't qualify you to file a court case through FPA?
borntowinlll
Recruit
- Messages
- 1
Hi Leroy,
I think we can try to discuss it privately as I also face the same situation, and I have sent private message to you
I think we can try to discuss it privately as I also face the same situation, and I have sent private message to you
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