Hargreaves Lansdown (HL) today

[MajorDutch]

I have been watching HL today in early trading. They are about to join the FTSE100 as reported in the press (thanks to member DashRipRock for coming up with this idea). So essentially at close of business this friday HL will be added into the FTSE 100. There should follow plenty of buying by tracker funds / etf's in what is essential a relatively illiquid stock.

Looking at the price feed this morning it would have been very easy to buy in at 635p and sell at 640p making a quick 5p. currently trading at 643p. I have a full LSE price feed and I can get in at low volumes for around 1 pence spread.

The question is how do people get around the 0.5% stamp duty and also use plenty of leverage to take advantage of small price movements. I suspect the answer might be to take out a SB however IG index are currently quoting me a 5.7pip spread so this getting on for 1%. I guess this is the reason why people trade US stocks as there is no stamp duty?

All help appreciated thanks

 

[Jack o'Clubs]

CFD.

You need to be careful about trading entries / exits from the FTSE as tracker funds have more discretion than you might expect to anticipate these events, precisely to avoid pops in the price caused by their buying. Many will already be positioned - remember that FTSE indices announce who'll go up and down a couple of weeks (IIRC) before the changes are made in the index.