SPI - Holding both short & long into weekend - Aussie Stock Forums

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  1. #1

    Default SPI - Holding both short & long into weekend

    Hi guys,

    I would love some feedback on the following idea:
    I have an account with a trading platform that provides a guaranteed stop loss on the SPI Index.

    So would the following work?
    Just prior to the Index closing 8.00am Saturday morning open two positions one long & one short. Set a low guaranteed stop loss (say 15 points) on both positions.
    The index then opens at 9.50 Monday morning.

    In theory the market will move greater than 15 points?
    For example the market opens 40 points higher.
    Your short position closes at a loss of 15 points
    Your long position is ahead say 35 points (less 5 points for the spread & the guaranteed stop loss)
    Less the loss of the short position 15 points.

    In theory you are ahead 20 points.

    With the long Labour day w-end approaching this could increase the potential for a greater move in the market on open.

    What do you guys think?

    Following the suggestions of keeping losses low (caped) and not limiting your gains.


  2. #2
    Can be found on the bid Trembling Hand's Avatar
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    Jun 2007

    Default Re: SPI - Holding both short & long into weekend

    Sorry silly idea. For starters you would need two accounts you cannot be long and short the same instrument in the same account.

    and the last 6 weeks would of given you 60 SPI points(results being 0,20,8,2,20,10) I am guessing this is with some crappy CFD provider so you will be down every transaction at least 10 points because you have 2 positions that's needs to be closed so you are paying 2 times if the GTSL is not triggered. which would of been 4 times the last 6 weeks.

    Is there any other brokerage cost or some extra charge for GTSL?

    But the real problem is if the SPI closes at 6000 you will be:
    Long @ 6003 stop at 5688 and
    Short @ 5998 stop @ 6013 but I doubt the overnight Spread is that close on the close. so you will be stopped out on a smaller move not leaving you much profit after spread. As its an arbitrage trade you have to close the winner as soon as the loser is stopped out.

    Why do you think that the SPI will open 40 diff from sat morn close? It hardly ever really moves that much on any overnight close.
    Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? -Hunter S. Thompson

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