Trading the index - I'm a newbie

[John26]

Hi,

Just read "The essentials of indices" by timsk (sticky post), but could not find anything in there that directly relates to my question

I purchased some UKS, and my understanding is that it moves in the opposite direction of the FTSE100. However, i was looking at historical prices and a matching price on the uks, doesn't seem to directly correlate to a matching index looking at history.
My question: Does the UKS lose value over time? Does that mean that UKS or UKL aren't ideal for longer term (I swing trade mostly, so say 1 week or thereabouts)? Are these more for day trading?

Many thanks.

 

[f2calv]

You can't compare prices of UKS/UKL directly against the index as the ETFs get rebalanced either nightly (or some other timeframe), ultimately it's the percentage movements you should be interested in not the levels.

IMO UKS & UKL holding for a few days or even a week or two is just fine.

Note: I wouldn't be buying UKS now, a better risk/reward would be a small position in UKL to ride a bounce back up, or wait for higher levels to short against.

 

[John26]

You can't compare prices of UKS/UKL directly against the index as the ETFs get rebalanced either nightly (or some other timeframe), ultimately it's the percentage movements you should be interested in not the levels.

IMO UKS & UKL holding for a few days or even a week or two is just fine.

Note: I wouldn't be buying UKS now, a better risk/reward would be a small position in UKL to ride a bounce back up, or wait for higher levels to short against.

Thanks. That makes sense.
Well, I bought some 3UKS this morning, and that's doing well for now :clap:.
I should hold these as I can see FTSE dropping to 5600 by end of week (or making even breaking below).

Cheers.

 

[f2calv]

Find the exact ftse level at which you bought 3UKS this morning and subtract ~20 points to find your breakeven (because you're paying via the spread). And remember no market moves in a straight line, good luck!

 

[John26]

Find the exact ftse level at which you bought 3UKS this morning and subtract ~20 points to find your breakeven (because you're paying via the spread). And remember no market moves in a straight line, good luck!

Ok, cool, thanks.
I'm looking at this (from a TA point of view) - The yellow circle - I might have it all wrong but we'll see, I've kept on moving my stop loss up so I have a good bit of margin. What does my target look like in your opinion?

Cheers.

 

[f2calv]

Sorry I have no thought either way on your target/timeframe - personally I'd squeeze another few points out of the ETF and then re-enter at higher (and safer) levels.

Paying no stamp duty on these ETfs means you can day trade these ETFs if you *really* wanted, i.e. go into your evening with zero stress that the market will reverse overnight.

 

[f2calv]

Just purchased some 3UKL for a bounce.

 

[f2calv]

Just purchased some 3UKL for a bounce.

Already out for +£61 ...such a risk taker I know.

 

[John26]

Already out for +£61 ...such a risk taker I know.

Why would anyone go long here when the markets are clearing tanking?
I must be missing something... lol - I still have a lot to learn obviously :innocent:

 

[f2calv]

Why would anyone go long here when the markets are clearing tanking?
I must be missing something... lol - I still have a lot to learn obviously :innocent:

Be a contrarian thinker, not a sheep.

Markets never go in a straight line.

Go for a low risk, high reward trade, i.e. ftse has dropped 200+ points in a day, which is a crazy amount, the market most often pulls back a bit when bargain hunters will then step into the breach.

Also worth looking at "recent trades" on HL;

http://www.hl.co.uk/shares/shares-search-results/b/boost-issuer-plc-ftse-100-ultra-short-strat
^ note lots of buys of 3UKS in the morning (you were one of them), but not so many buys in the afternoon when the majority of the downmove is done.

http://www.hl.co.uk/shares/shares-search-results/b/boost-issuer-plc-ftse-100-super-leveraged
^ note lots of buys mid-morning, and a few jonny big bollox buys going into the close. 1000 units purchased at 16:02. My [probable] 100 unit sale is at 16:04 :innocent:

 

[John26]

Be a contrarian thinker, not a sheep.

Markets never go in a straight line.

Go for a low risk, high reward trade, i.e. ftse has dropped 200+ points in a day, which is a crazy amount, the market most often pulls back a bit when bargain hunters will then step into the breach.

Also worth looking at "recent trades" on HL;

http://www.hl.co.uk/shares/shares-search-results/b/boost-issuer-plc-ftse-100-ultra-short-strat
^ note lots of buys of 3UKS in the morning (you were one of them), but not so many buys in the afternoon when the majority of the downmove is done.

http://www.hl.co.uk/shares/shares-search-results/b/boost-issuer-plc-ftse-100-super-leveraged
^ note lots of buys mid-morning, and a few jonny big bollox buys going into the close. 1000 units purchased at 16:02. My [probable] 100 unit sale is at 16:04 :innocent:

Yes, interesting, thanks for the insight
I now wish I'd sold them before close - Oh well, all I can hope for the FTSE to open down
I'm curious, if you don't mind me asking, why your sale at 16:04?

 

[f2calv]

I'm curious, if you don't mind me asking, why your sale at 16:04?

I wasn't wholly convinced it would go further up the next day, of course it went up ~100 points from my entry but rather some profit than getting burnt!
However today its nicely back down to your target area so I hope you've got a plan - just don't get greedy, if you're still holding maybe take a percentage off the table?

 

[John26]

I wasn't wholly convinced it would go further up the next day, of course it went up ~100 points from my entry but rather some profit than getting burnt!
However today its nicely back down to your target area so I hope you've got a plan - just don't get greedy, if you're still holding maybe take a percentage off the table?

Not bad today for me, bought xuks at 608 and sold at 613 (got out a little too early) - waiting for market to bounce back up now - which it's doing now but looking a little too weak for me to go long yet.

Cheers.

 

[f2calv]

Not bad today for me, bought xuks at 608 and sold at 613 (got out a little too early) - waiting for market to bounce back up now - which it's doing now but looking a little too weak for me to go long yet.

Cheers.

Cool. Probably be to wait for the gap fill [if any] on the US open before you go short again.