Lemstaboy
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This is an easy-going little low-stress spreadbetting sideline alongside my more serious trading. Occasionally it fails, but for me it works more than 4 times out of five, and is profitable enough for me to keep doing it. I do it in a VERY unsophisticated way, for small money, using no indicators. I imagine that active traders employing greater precision can refine it for greater success at much bigger stakes - but here's how it works for me, with a couple of recent examples from a few days ago.
At 8.15am (when it becomes available for free - I am not a paying subscriber there) I call up the 'Percentage Gainers' list from Advfn's 'Toplists'.
The biggest gainers tend to be among penny shares which I ignore. Among those that have risen 7% or more I pick out the 3-digit/4-digit priced stocks There's usually between 2 and 5 of them). I quickly check out the reason for the rise (usually news related) and the bid/offer spread, then glance at a minute-by-minute rolling price chart (usually at Spreadex, sometimes at IG) to see if it looks like the initial spike is beginning to fade. If in my casual judgement it is, I slap in a downbet - sometimes at the minimum stake allowed, but usually at a stake involving a margin requirement of around £200+ which I then repeat with multiple bets the same size if it looks like it is starting to move convincingly my way. (I prefer to do it in this fragmented fashion because it allows me to individually cash in the initial tranches when they've moved far enough into profit).
More often than not, the downward drift happens quickly enough to cash in my gains the same day - sometimes within the hour. Sometimes it doesn't, and in the minutes before the market closes I will decide whether to let the bet run on to the next day (which I'd rather not do), or close it (maybe without it yet having moved into a worthwhile (or any) profit) rather than risk it opening up next morning.
EXAMPLE: When Melrose Industries (MRO) spiked at 8am on Aug 1, I placed four £2pp downbets, at 0818 (543.6p), 0850 (540.4), 0851 (540.4), 0851 (540.4).
At 0934 I closed all four, at prices between 534.4p and 535p, banking £52.40
EXAMPLE: When Rentokil (RTO) spiked at 8am on 31 July, I placed a £3pp downbet at 0835 at 383.5p. At 1436 I placed a further £3 downbet at 383.4p.
I kept those bets open overnight, cashing them in at 0809 on Aug 1 at 368.05p, banking £92.40
I don't always get it right. I might occasionally bank a loss of £100-£150. And because I am often content to bank wins of £50, £90, or sometimes tinier, so for winnings to outweigh losses I do have to win a lot more often than I lose. This morning I placed downbets on Close Brothers (CBG) and Secure Trust Bank (STB), all of which are into profit - which I could bank or could keep open.
For spreadbets I mostly use Spreadex, sometimes IG. I use IG for my sharedealings.
I would be interested to hear feedback from anyone trying the same game of downbetting selected morning spikes.
At 8.15am (when it becomes available for free - I am not a paying subscriber there) I call up the 'Percentage Gainers' list from Advfn's 'Toplists'.
The biggest gainers tend to be among penny shares which I ignore. Among those that have risen 7% or more I pick out the 3-digit/4-digit priced stocks There's usually between 2 and 5 of them). I quickly check out the reason for the rise (usually news related) and the bid/offer spread, then glance at a minute-by-minute rolling price chart (usually at Spreadex, sometimes at IG) to see if it looks like the initial spike is beginning to fade. If in my casual judgement it is, I slap in a downbet - sometimes at the minimum stake allowed, but usually at a stake involving a margin requirement of around £200+ which I then repeat with multiple bets the same size if it looks like it is starting to move convincingly my way. (I prefer to do it in this fragmented fashion because it allows me to individually cash in the initial tranches when they've moved far enough into profit).
More often than not, the downward drift happens quickly enough to cash in my gains the same day - sometimes within the hour. Sometimes it doesn't, and in the minutes before the market closes I will decide whether to let the bet run on to the next day (which I'd rather not do), or close it (maybe without it yet having moved into a worthwhile (or any) profit) rather than risk it opening up next morning.
EXAMPLE: When Melrose Industries (MRO) spiked at 8am on Aug 1, I placed four £2pp downbets, at 0818 (543.6p), 0850 (540.4), 0851 (540.4), 0851 (540.4).
At 0934 I closed all four, at prices between 534.4p and 535p, banking £52.40
EXAMPLE: When Rentokil (RTO) spiked at 8am on 31 July, I placed a £3pp downbet at 0835 at 383.5p. At 1436 I placed a further £3 downbet at 383.4p.
I kept those bets open overnight, cashing them in at 0809 on Aug 1 at 368.05p, banking £92.40
I don't always get it right. I might occasionally bank a loss of £100-£150. And because I am often content to bank wins of £50, £90, or sometimes tinier, so for winnings to outweigh losses I do have to win a lot more often than I lose. This morning I placed downbets on Close Brothers (CBG) and Secure Trust Bank (STB), all of which are into profit - which I could bank or could keep open.
For spreadbets I mostly use Spreadex, sometimes IG. I use IG for my sharedealings.
I would be interested to hear feedback from anyone trying the same game of downbetting selected morning spikes.
