Rolling over with ig index

[jonboy123]

ig index rolling over a bet.
Im not fully understanding it. say my
quarterly bet expires next week at a loss of £50.

Say i roll it over for the next quarter. The loss is realised. The loss is taken out of my deposit i think....

And a new bet is opened. At the roughly £50 loss level which will expire at the next quarter...

To break even would be to actually break even? eg.....make the £50 back.....or do i
need to make £50 profit..after breaking even....to cover the loss at the
time of rolling over? in effect.... wanted to make gains of £100 ....to break even...

or would break even at p&L actually l mean that any Profit after breaking
even....would actually be mine......as breaking even.....would cover the
old rolling over loss of £50?

Im at a £60 loss with rbs.......if i roll over.......that just gives me more time doesnt it? there are no other drawbacks are there? I dont have to make double the gains to cover the loss do i + take profit?

eg situation now = £60 loss.....situation at next quearter if i roll over
= £60 loss...i just need to get that loss to ZERO to break even right? and
any excess is profit, right? SO IN EFFECT, ITS THE SAME SITUATION AS I AM NOW, I WANT THE £60 LOSS TO DECREASE TO ZERO TO BREAK EVEN...AND THEN OVER TO MAKE PROFIT.......

SO ROLLING OVER JUST GIVES YOU MORE TIME, RIGHT?

only if you close the rolled over bet at a loss in the future....then you have two losses to deal with,,,,the original rolled over loss realisation.....and the closing loss........right?

anyone explain it simple to me?
please.

thankyou.

so rolling over is just the spreadbetting company taking the LOSS money from you, in the meantime, giveing you extra time to play with the bet.....compared to the loss just being a paper loss now, with no money being given or recieved.......correct? so in reality....its just the same situation i am in now.......right?

 

[jonboy123]

say if i roll over at £60 loss.

And then in the future i close the bet at a £20 loss.

How much money have i lost in total? £20?....as i got £40 closer to breaking even.....

 

[Calinor]

You are running a £60 loss. When they close that, they will take £60 from your account, and because you asked them to roll it over, they will open a new position for you, same amount, same stop, except you will pay a little bit because of the spread again. Now this NEW bet starts from 0 (minus the spread cost) and adjusts as the thing changes price. If it goes to -£20 as well, then you have lost the £60 from before and are losing another £20.

Total money you would be down is 80 (but 20 of that is still a running bet).

SO ROLLING OVER JUST GIVES YOU MORE TIME, RIGHT?

You mentioned a quarterly bet. If it is running for 3 months, and you are down, then maybe more time is not what you want. You can enter or come out of the market whenever you want and it doesn't have to be at that roll-over price each time. It is worth rolling over if it is moving in your direction, rather than against you, right?

 

[jonboy123]

thankyou...
yes they take the £60 from me

So new bet starts from the current BUY price? Not from my original buy price?


so if what you are saying is correct.......the new bet.....has to be £61 in profit.....for me to make £1 profit after covering the old loss of £60........?

 

[Calinor]

The new bet will start from a price somewhere within in the bid-ask (buy-sell) spread for rollovers, but yeah if you originally were buying, then it will be closer to that buy price as if you had opened the new bet yourself. With rollovers they usually give you a slightly better price than that, but not much.

And yes, you would need to gain £61 on the new bet to make an overall profit. I would say though that this might not be the best way for you to think about trading. It is a quite natural way to think, but that doesn't mean it is a good way. The £60 is gone. Forget it. Already gone. You have a new bet now. You should be trying to make as good a profit as possible with that new bet. Try not to think about the old bet. Don't hang in a new bet that isn't working just because you want to make make £61. Just my advice.

 

[jonboy123]

the £61 example was just to simplify and understand the process/concept of this situation.
Of course im not aiming to make £1 profit. I just want to get it all clear in my head.

Ive been told to think of it ALL as one bet...focus on the original opening BUY price which i made on the first contract....and NOT to treat it as two separate bets.....cause if i make £10 profit on the second bet..... im still at a loss....if i made £50 loss on first contract.....

but thanks... tricky concept to understand/explain.
I will be rolling over next week.

 

[Calinor]

Yeah I understand thinking of it as one bet is fine sometimes, I might do that if it was a daily rollover. But quarterly bets are a long long time for a bet to come good. And if it failed after 3 months, then it failed in my view. But I think short term, and you may be long term. And also I said it because I don't want you to stay in a bad bet just because you want to make back the money you lost. You entered. After a fair amount of time, it was shown that you lost. Are you sure you want to be still in that trade? If you're sure, then fine

 

[jonboy123]

i did not put the bet on 3 months ago, its only been a month or less.
Yeah i see what youre saying. Ive thought about it hard. Rolling over is ok i believe....even if for the actual act of learning and seeing how it plays out.

RBS man. Ive put £10 a point on, i just need it to rise like 5p or summat then im GOOD.
But ive learned a lesson, when a decent amount of profit is showing, to TAKE it. I let it run, and they go down into losses. ...well, in my trades anyway. Best to take the profit, and when the value dips, buy back maybe or move on.

Best way to learn is actually do the trades.
Ive read lots and stuff.
But when i do the trade and see how it is in real life...then it sinks in properly and surely.

Thanks man.

Im not too comfortable with the rolling over concept as yet.
I try to avoid daily bets, and usually go with the quarterly as default.

 

[BlackSwan_UK]

I'm not sure what markets you trade with IG, but if it is futures, when rolling over, you need to calculate the fair value also. Say July crude expires and you roll it to Aug crude, the difference between the 'close for your july crude trade' and the 'open for your aug crude trade' can be a lot more than just the spread - this is fair value. in a contango (normal market), far months futures are priced higher than near months; in a backwardation market, it's the opposite.

 

[jonboy123]

no just shares currently.
Im slightly confused about the word futures.
I thought it meant commodities.
But IG say futures means contracts that expire in the future....like a forward contract......
There seems to be diff meaning to the word futures or future.

I have a RBS futures shares bet.

 

[BlackSwan_UK]

no just shares currently.
Im slightly confused about the word futures.
I thought it meant commodities.
But IG say futures means contracts that expire in the future....like a forward contract......
There seems to be diff meaning to the word futures or future.

I have a RBS futures shares bet.

Sorry about the delay in reply. I think you can benefit from searching the internet on 'futures'. Initially, futures are used purely by hedgers, say Hovies will enter into wheat futures contracts with farmers, in order to lock in prices for the year ahead. Hovies wants to avoid any supply shock in the 'future' that would drive prices sky high, and farmers want to avoid any supply shock in the other direction that would drive prices floor low. Hence they enter into a futures contract. Later on speculators came into the market and these have no interest in taking delivery.

Futures are very simply instruments to understand. Options are a bit more complex but unless you go into the Greek terms they are quite simple also. If you like trading you would certain benefit from reading on the topic.

Good luck!