Okay, well I was under the impression that when a company comes out of a trading halt following a placement that the share price AND CFD price would be restructured to cater for the new dilution.
Hence, I assumed that my CFD broker would cater for this and adjust my stop to reflect the placement in the underlying equity.
This isn't so. There is no adjustment so you will always get taken out. I was caught on API and IIF this week and got smacked around because my stops aren't adjusted by my broker. That pretty much means that every placement you get caught in if long, will force a gap under your stop and take you out.
This seems to contravene the ASX framework for CFDs-
The ASX will adjust CFD’s in response to Corporate Actions to ensure (as far as possible) that buyers and sellers of
Equity CFD’s are not penalised by the event (i.e. neither better nor worse off as a result of a corporate action). The
value of the CFD holder’s positions both before and after the corporate event should be equal (exclusive of market
movement) regardless of whether they are long or short.
As an eg, you can see below the disparity between API equity (top graph) and CFD. You can see the price has been reweighted on the equity to cater for the placement.
Do you guy's experience the same problem with CFDs when long??