shadowninja
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I had a look. Not convinced. I noticed the price varies with the bungee you choose, which is annoying. It therefore could be profitable if you are already a good trader.
Trevor2522
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This is just a cynical attempt by IG Index to confuse punters and separate them from their money by promising 'no stopouts'.
Bets are excessively complex to set up: 16 floor or ceiling levels for each cross. Then the spreads are wider than regular spreadbets. And the prices are flagrantly biased in IG's favour.
What a sham! I think they will be quietly dropped once customers desert them.
Just stick to regular spreadbets with a stop and limit.
Bets are excessively complex to set up: 16 floor or ceiling levels for each cross. Then the spreads are wider than regular spreadbets. And the prices are flagrantly biased in IG's favour.
What a sham! I think they will be quietly dropped once customers desert them.
Just stick to regular spreadbets with a stop and limit.
arabianights
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It looks like a combination of a long and a put.... or a short and a call. So basically if vol increases massively then presumably so will the spread.
Those bets are equivalent to portfolio insurance, i.e. long position plus put option or short position plus call option.
The drawback with the Bungee bet is that you have to open both the spot and option position simultaneously, whereas the same protection will be cheaper to buy later, using options, than at position entry - assuming the underlying goes your way initially.
If the underlying doesn't go your way initially, you were simply wrong and an ordinary stop loss would be cheaper protection.
The benefit of the Bungee bet is that both spot and option get closed out at expiry, so the bet makes sense if you intend to leave the position open until expiry - for example if you will be unavailable to close the position manually. Then, again, a limit order and a wider stop would do a good job as well.
Finally, the insurance protection will be cheaper the later in the day you enter the position, as there will be less time premium to pay in the option.
The drawback with the Bungee bet is that you have to open both the spot and option position simultaneously, whereas the same protection will be cheaper to buy later, using options, than at position entry - assuming the underlying goes your way initially.
If the underlying doesn't go your way initially, you were simply wrong and an ordinary stop loss would be cheaper protection.
The benefit of the Bungee bet is that both spot and option get closed out at expiry, so the bet makes sense if you intend to leave the position open until expiry - for example if you will be unavailable to close the position manually. Then, again, a limit order and a wider stop would do a good job as well.
Finally, the insurance protection will be cheaper the later in the day you enter the position, as there will be less time premium to pay in the option.
well everyone has an opinion and off course views will differ.
i thought i would test it live! - did a bet on forex yesterday.
one was anormal bet with a stop
and the other was a bungee
guess what, the normal got stopped out , and retraced back heavily in the direction of my original trade! so i made a loss
On my bungee i made a profit
so guess there is a market for everything
so hats of to IG for being innovative
IG Index Zindabad!! LOL
tar
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well everyone has an opinion and off course views will differ.
i thought i would test it live! - did a bet on forex yesterday.
one was anormal bet with a stop
and the other was a bungee
guess what, the normal got stopped out , and retraced back heavily in the direction of my original trade! so i made a loss
On my bungee i made a profit
so guess there is a market for everything
so hats of to IG for being innovative
IG Index Zindabad!! LOL
how much far the floor or the ceilieng usually could u bring an example , i dont have an access to Ig platform ?
georgewallis
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Surely a long bungee is exactly the same as buying a daily FTSE call with the strike equal to the bungee 'floor', and a short bungee just a long naked put. Sounds to me like a way of selling options to people who don't know what an option is, or are scared of them.
arabianights
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That's exactly what it is.
So anyone trading these had better understand how options are priced otherwise they're trading blind.
Hint: 99% won't.
Oh well, fools and their money....
Marwan2010
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I normally have 20/30 pips away from the current spot, so effectively doing bungee is costing you anything between 20/35 pips, but not being afraid of being stopped out
As an example I did 2 bets yesterday, both long on GBP
one a normal, with a 25 pip stop - this got stopped out
the other with a bungee - this ended with a profit of 59 pips
Marwan2010
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That's exactly what it is.
So anyone trading these had better understand how options are priced otherwise they're trading blind.
Hint: 99% won't.
Oh well, fools and their money....
SELLING NAKED options has limited gain, and an UNLIMITED loss
Bungee is not like that!!
off cource everything has pros and cons
if you love it you kiss it
and if you find it ugly, then stay away
LOL
Marwan2010
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EXAMPLE - this morning I did JPY sell bungee, CEILING 10640, price I got was 10587
so in case JPY goes sky high, the max i can lose is 10640-10587.
Say if jpy goes to 10700, i am still in the bet i dont get stopped out
then say the JPY collapses to 10500, i am still in the trade and I make 87 pips profit
after the position is 30 pips in profit, i often close half, and this can sometimes give you a free ride!
so in case JPY goes sky high, the max i can lose is 10640-10587.
Say if jpy goes to 10700, i am still in the bet i dont get stopped out
then say the JPY collapses to 10500, i am still in the trade and I make 87 pips profit
after the position is 30 pips in profit, i often close half, and this can sometimes give you a free ride!
tar
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intresting , maybe i will try it myself at ftse and dow
Marwan2010
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FXSCALPER2
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That is expensive! Would you do worse over time if you just short it with a 53 pips stop?
tar
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U r right , but if u can catch 20 point floor for the Dow i think it is better than 20 points normal stop , u will get stopped out in an eye blink
Marwan2010
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yes it is expensive, not normally i would open a bet with a big risk, normally i am looking for max loss of 35, often i pick up trades for 25/30 pips loss
as i said the best time to trade is in the afternoon, as in the morning you have a big time value
Marwan2010
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closed half for a 50 pip profit
now I have a free ride! - no matter what happens I cannot lose
The premiums were expensive cos of the nfp - as i said earlier, i would not trade anything witha risk of 35+
