hello folks,
I have a long trading stock portfolio (not CFD`s) and I would like to protect my capital against any major fall.
Now I can have a short portfolio, but its a lot more work, takes up a lot of capital (opportunity cost) and will probably lose money on it.
Another idea is a far out of the money put on an index, but I hear it costs about 3% per year of your capital + only 85% of your capital is covered.
Now I thought about a third option to protect my capital against a crash and maybe you guys can tell me if it would work.
What if I place a stop sell order with a CFD provider at say 200 points away from the last quote of the Dow. I hear you only deposit 1% of your order value if you place an index order.
So the Dow is say 12,500 and I place a stop sell order to sell @ 12,300 or lower.
Every day I will check the last quote of the Dow and adjust my stop sell order accordingly.
Then the day comes: a lot of panic, people trying to ring their brokers, broker`s websites going down, but my order is already in there and the Dow is going lower and lower and lower.
It hits 12,300 and is still going down..............
Will my order be filled around 12,300 or ????????
Can you people tell me what the likely scenario will be?
thank you for your help
I have a long trading stock portfolio (not CFD`s) and I would like to protect my capital against any major fall.
Now I can have a short portfolio, but its a lot more work, takes up a lot of capital (opportunity cost) and will probably lose money on it.
Another idea is a far out of the money put on an index, but I hear it costs about 3% per year of your capital + only 85% of your capital is covered.
Now I thought about a third option to protect my capital against a crash and maybe you guys can tell me if it would work.
What if I place a stop sell order with a CFD provider at say 200 points away from the last quote of the Dow. I hear you only deposit 1% of your order value if you place an index order.
So the Dow is say 12,500 and I place a stop sell order to sell @ 12,300 or lower.
Every day I will check the last quote of the Dow and adjust my stop sell order accordingly.
Then the day comes: a lot of panic, people trying to ring their brokers, broker`s websites going down, but my order is already in there and the Dow is going lower and lower and lower.
It hits 12,300 and is still going down..............
Will my order be filled around 12,300 or ????????
Can you people tell me what the likely scenario will be?
thank you for your help
