Trading shares on leverage below £xm market cap

[SanMiguel]

What do you think would be a minimum market cap for trading shares on leverage?
I know IG is supposed to have a market cap minimum of 50m so that the shares are liquid but I'm specifically trying to prevent the circumstance where a small cap share halves in price overnight.
Is it best to use guaranteed stop losses on all shares of a certain market cap held overnight?

 

[wackypete2]

Trading small cap stocks is risky no matter how you trade them. Overnight is worse for just the reason you state. There are no guaranteed stop losses especially on overnight trades. You would get stopped out at the opening price the next morning. Try trading fewer shares or using less leverage is the best I can tell you.

Peter

 

[SanMiguel]

Trading small cap stocks is risky no matter how you trade them. Overnight is worse for just the reason you state. There are no guaranteed stop losses especially on overnight trades. You would get stopped out at the opening price the next morning. Try trading fewer shares or using less leverage is the best I can tell you.

Peter

Lots of brokers offer guaranteed stop losses on overnight trades but it's likely calculated on the basis of average ranges and insurance. Also, the percentage extra you pay for a guaranteed SL must come into the equation.
Perhaps that's just the SHorts & LOngs broker, in which case what is the point in a guaranteed SL?

 

[wackypete2]

Lots of brokers offer guaranteed stop losses on overnight trades but it's likely calculated on the basis of average ranges and insurance. Also, the percentage extra you pay for a guaranteed SL must come into the equation.
Perhaps that's just the SHorts & LOngs broker, in which case what is the point in a guaranteed SL?

This is what happens when different countries have different regulations. You get people like me giving you incorrect answer. :whistling

Nothing in your statement above is applicable in the US, but obviously you don't care about that!

Only the last line in my 1st response is still valid.

Peter

 

[SanMiguel]

Trading small cap stocks is risky no matter how you trade them. Overnight is worse for just the reason you state. There are no guaranteed stop losses especially on overnight trades. You would get stopped out at the opening price the next morning. Try trading fewer shares or using less leverage is the best I can tell you.

Peter

When you say fewer shares, how much less would you go?
Say a normal position in a stock was 10% of your account...actually I usually hold less than that. In leveraged environments, perhaps it's better to think of your leverage portfolio?
Normally you might put 1-2% of your leveraged account at risk but on a gap down that might turn into much more.