This morning I went short at 4472 on 2 contracts, then bought 4 to go long on 2 at 4465 just as the opening gap was closing, then added to them a few points further down. I actually hit both top and botton of the opening half hour spot on. All looked OK until we hit 4072 again then, downhill all the way - Oh dear! - and I thought I was being sooo clever. I was certain we were going to see 4490-4450. Just how wrong can you be?
I watched both the IG and Cantor cash contracts like a hawk for most of the afternoon and something is puzzling me. It goes like this:
As we approached the closing bell, both contracts continued their irratic but inexorable decline to as low as 4423 before bouncing a couple of points to 4425 at the end (ie well below the provisional index close). During that time the US markets (DJIA & S&P500) had remained fairly steady and off their earlier lows at about 0.15% down. Within 1 minute of the UK close both the IG and Cantor cash contracts had shot up about 6-8 points whilst the US remained static.
Anyone care to offer some thoughts on the mechanics of this kind of thing in terms other than the value of futures because I'm near certain that the operators marking the IG and Cantor contract values up in those few seconds did so with reference to things other than exchange indexes.
For information, I had a couple of years manageing small Broker bonds (£3-5 million back in the mid-eighties - all telephone/paper based then) but am relatively new to trading stocks and indices on my own account - just 6 months to date. Done blindingly well until today when I seem to have caught a bit of a cold! Must have been getting a bit cocky I guess - Still, a bit of healthy failure is good for the soul they say, so I think I'll just book it to lessons paid for and learned!
Roll on Tuesday!!