Greece...

chucknorris

Generali wrote: »

Have you thought about CFDs instead? You save the stamp duty and you can use leverage so you don't need to put in so much money to get the same return/loss.

To trade the index, I'd definitely be using some sort of derivative product: CFD or future perhaps.

ETFs are for LTBH not trading.

This is quite embarrassing but I don't even know what a CFD is? But to be honest, I am just playing out a slight 'boredom with conventional investment' ATM. Shortly I will go into stepford mode as retirement approaches, as I know that I need to avoid risk. I think the time to take on risk is when you are not where you want to be, that isn't me, so Ill probably just throw it all in with a boring passive ETF (I think if I tinker too much in the long term, it might prove costly, but who knows I might just do it anyway).

michaels

Contract For Difference - so basically a derivative so you can have the same exposure per point on the FTSE without supplying most of the capital.

Generali

Yup, as michaels says a CFD is a contract for difference whereby you bet whether the FTSE is going to go up or down. If you are right your broker pays you a pre agreed amount per point it has gone in your direction, conversely if you are wrong you pay your broker the same.

You have to put up margin against losses. The only con really is the places that encourage you to trade on such a small margin that you'll end up hitting your margin limits all the time judt because of noise.

What you are doing is a very risky trade so perhaps better to minimise your costs to maximise your chances of coming out on top. Most people trading like you lose money in the end.

Generali

Back on topic:

http://www.stltoday.com/business/local/ecb-to-hold-emergency-call-on-greek-bank-funding-friday/article_eb898e89-b4d8-5977-a534-046ba0325e47.html

The short version is that the ECB are having a conference call today (Friday) to decide on whether the Greek banks will be able to open on Monday morning.

http://www.marketpulse.com/20150618/ecb-increases-greeces-ela-ceiling-to-84-billion-to-address-liquidity-concerns/

The ECB has already had to raise the Emergency Liquidity Assistance to Greece by EUR2,300,000,000 to EUR84,000,000,000.

To make the point, there are a little over 9,000,000 adults in Greece so the ECB is propping up the banking system to the tune of EUR9,000 per adult!

princeofpounds

To make the point, there are a little over 9,000,000 adults in Greece so the ECB is propping up the banking system to the tune of EUR9,000 per adult!

IIRC it's about a quarter of the banking system now, maybe one-third after this week's fun and games.


Obviously deposits don't just come from Greek households. Businesses have them too, and government deposits are also hugely important (in fact until last week over half the so-called deposit flight was the government running down its cash).


But it's still a big number by anyone's measure.


Much of the money is just sitting offshore or in the metaphorical mattress, so with a deal you would probably see deposits grow quickly and ECB aid drop away fast. Just like last time.

chucknorris

Generali wrote: »

Yup, as michaels says a CFD is a contract for difference whereby you bet whether the FTSE is going to go up or down. If you are right your broker pays you a pre agreed amount per point it has gone in your direction, conversely if you are wrong you pay your broker the same.

You have to put up margin against losses. The only con really is the places that encourage you to trade on such a small margin that you'll end up hitting your margin limits all the time judt because of noise.

What you are doing is a very risky trade so perhaps better to minimise your costs to maximise your chances of coming out on top. Most people trading like you lose money in the end.

Ahh you mean like spread betting? The thing that I don't like about that is that there is a time limit (i.e. a specific settlement date), whereas selling an ETF (when higher) and buying back (on a dip) has no time restrictions, so far less risky (in fact the only risk is that the market surges when I am out, but that is balanced by the fact that the market could collapse while I am out. Not very scientific I know, but it seems to be providing profits and some entertainment (yes I need to get out more).

Generali

chucknorris wrote: »

Ahh you mean like spread betting? The thing that I don't like about that is that there is a time limit (i.e. a specific settlement date), whereas selling an ETF (when higher) and buying back (on a dip) has no time restrictions, so far less risky (in fact the only risk is that the market surges when I am out, but that is balanced by the fact that the market could collapse while I am out. Not very scientific I know, but it seems to be providing profits and some entertainment (yes I need to get out more).

No time limit on a CFD. As long as you've got the margin they'll hold your position open.

mwpt

Generali wrote: »

No time limit on a CFD. As long as you've got the margin they'll hold your position open.

But it is purely a bet, not an investment. At least when using a tracker, you'll have the slight benefit of dividends and you're not forced out of your position in a major event, you can hold and wait out (if you don't need the cash).

Very off topic now.

Generali

mwpt wrote: »

But it is purely a bet, not an investment. At least when using a tracker, you'll have the slight benefit of dividends and you're not forced out of your position in a major event, you can hold and wait out (if you don't need the cash).

Very off topic now.

Nope. You should get dividends on a long CFD position. You will in a single name anyway, perhaps it's different for an index but I don't see why it should be.

You also are expected to pay dividends on a short CFD position.

mwpt

Generali wrote: »

Nope. You should get dividends on a long CFD position. You will in a single name anyway, perhaps it's different for an index but I don't see why it should be.

You also are expected to pay dividends on a short CFD position.

Hmm, you sure? Since this started as a discussion about how we'd invest, I'm speaking as amateur investors. What options are available for CFD trading to an amateur investor that yield dividends? And if it's only in a single name, that is also pointless since we were talking about trading the index.