Using a GSL for a 100k short position ?

This is a discussion on Using a GSL for a 100k short position ? within the General Trading Chat forums, part of the Reception category; leonarda it's basically like house insurance. it's not a value trade - which is why insurance companies make money (over-simplified ...

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Old Jan 14, 2011, 2:25pm   #17
Joined Apr 2006
Re: Using a GSL for a 100k short position ?

leonarda it's basically like house insurance. it's not a value trade - which is why insurance companies make money (over-simplified i know, but you get the gist). so from a value point of view, it's a no. from a sleep easy point of view - only you know the value of your sleep!
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Old Jan 14, 2011, 2:25pm   #18
Joined Sep 2008
Re: Using a GSL for a 100k short position ?

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Originally Posted by shortsell View Post
pete, typically most charge 2.5% over 1 month libor. obviously guys position trading size aren't going to be on 2.5% - in my experience 1.5-2% is closer to the norm.

pboyles, any thoughts on how this compares to leverage costs with a DMA broker?
ok, question since I'm in US and I don't know....Does the sb firm charge for overnight positions even if you are not leveraged?

Peter
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Old Jan 14, 2011, 2:26pm   #19
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Re: Using a GSL for a 100k short position ?

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Originally Posted by shortsell View Post
oh i see pboyles, you're the sort of guy who uses one example out of a million trades to prove your point.

in which case there's not a great deal of point in engaging you in conversation.

i would encourage anyone reading this to ignore pboyles' contributions with regard to the spread betting industry. he doesn't understand the product in the slightest.
You are rather touchy about this criticism, can I ask if you are by any chance involved with a spreadbetting company?
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Old Jan 14, 2011, 2:28pm   #20
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Re: Using a GSL for a 100k short position ?

yes they do pete - but then they suffer funding costs with their underlying brokers on the value of their notional too - without discounting cash on deposit. it's pretty much industry average over here in my experience.
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Old Jan 14, 2011, 2:30pm   #21
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Re: Using a GSL for a 100k short position ?

As pboyles said, there is no spreadbetting allowed here in the US, but there is also NO charge for unleveraged overnight positions. Hold as long as you want.

Peter
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Old Jan 14, 2011, 2:30pm   #22
Joined Sep 2009
Re: Using a GSL for a 100k short position ?

leonarda started this thread
Quote:
Originally Posted by shortsell View Post
leonarda it's basically like house insurance. it's not a value trade - which is why insurance companies make money (over-simplified i know, but you get the gist). so from a value point of view, it's a no. from a sleep easy point of view - only you know the value of your sleep!
thanks.

also, I think such a short squeeze can't occur out-of-hours, as obviously you have to have active trading to cause the squeeze... which in case means your standard stop would take you out with a few minutes, in which case you may suffer say 50% or so...

so i'm thinking no to GSLs as well.
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Old Jan 14, 2011, 2:33pm   #23
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Re: Using a GSL for a 100k short position ?

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Originally Posted by pboyles View Post
You are rather touchy about this criticism, can I ask if you are by any chance involved with a spreadbetting company?
i have worked in the industry, and have been (and still am) a client of the industry - so i know it well from both sides of the fence and understand the product - particularly equities.

i trade stocks PA on an SB account and have historically been employed looking after an SB company's top equity dealing clients, so from a knowledge standpoint i'm in a good position to expose your ignorance.

that said, i won't be discussing specifics of any spread betting firm at all and have no financial interest in doing so.

Last edited by shortsell; Jan 14, 2011 at 2:39pm.
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Old Jan 14, 2011, 2:35pm   #24
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Re: Using a GSL for a 100k short position ?

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Originally Posted by wackypete2 View Post
As pboyles said, there is no spreadbetting allowed here in the US, but there is also NO charge for unleveraged overnight positions. Hold as long as you want.

Peter
of course not - why would you pay funding on an unleveraged position?

it's different if you have a position 100% cash-covered in a leveraged trading account though as at any time you could use that cash for other trades - so the default is that you pay funding on the entirity of your positions. i agree it's a pain, but it is the norm here.
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