Spreadbetting - Price jumps at market open - help?

[K-island]

Hello everybody,

Today I setup my trades before the US market open. I use the IG Index spreadbetting platform and I naturally had to set up orders to open for my 6 trades (all long).

As the market opened, all prices jumped and my positions were filled at horrible levels. I calculated the difference between my original orders and the ones IG filled and the difference comes up at 327 points! (I was betting £1 a point so my lost profit is of £327. )

I still made a profit of £140 :cheesy:but I am a little upset. I am very new to trading and I decided to write a post as I am sure that someone somewhere had had/is having the same problem.

Has anyone by any chance found a way to solve this discrepancy? Perhaps other spreadbetting platforms offer a better method?

I would highly appreciate any helpful advice.

Thank you and

All the best!

 

[ns1000]

Were you betting on shares or indices?

Sounds like you opened positions using stop orders - is that right?

 

[K-island]

Hello ns1000 and thanks for getting back to me.

I was betting on US stocks, all long. I did indeed use a stop order.

One example was Cimarex (XEC); I made the order for 1885 (closed the day before at 1880). Market opens and immediately hits 1987 (actually going above my profit limit set @ 1970...) - IG opened my position only at 1940 after a couple of minutes.

I am very happy having made £30 but I would like to know if there is any way I can actually catch the points that derive from market jumps? At the end of the day, if guaranteed stops exist, there should also be a way of guaranteeing profits?

I am sure I am not the only one having experienced this... any advice? - otherwise next time could be the same story! {

Thanks.

 

[ns1000]

It's probably inescapable I'm afraid. Stocks don't necessarily open at the same price they closed the day before in the real market. The opening price varies according to exchange, but in general is where there is a willing buyer and a willing seller. If there is news out on a share, the opening price may well be a long way from the closing price the previous day.

In leaving a stop order, what you're saying is 'buy the share at the best price you can get once it's above my level'. If a share closes at 1800, you place a buy on stop order at 1850 and the share opens at 1900, you should be filled around 1900, which is the first available price. Does this tally with how your orders were treated? It sounds as though it was. In this respect a 1940 fill on a share that opens at 1987 sounds acceptable.

 

[Shanghai]

This is definately something you should watch out for in the future and is a problem when you either place market orders or stop orders at the open. If the stocks gap up you will invariably get a horrible fill. If I estimate that the market will open about my stop level I will cancel my order and then wait to see what the market does. Bear in mind also that opening gaps are often filled so you were a little lucky not to make a loss.

What would be nice would be to find a platform where you can place stop orders but with a limit so that if there is an opening gap above your stop order then it simply doesn't get filled. If anyone knows of such a platform let me know.......