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How To Short Stock Market


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hi, this is my first post. Can anyone tell me how to short the ftse index? i,d like to do this over a year period, whats a way to do it with the least possible risk and the highest possible return, i accept i may lose all the money i put in. i seriously believe there will be a w shaped reccesion. many thanks

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Tip #1 - don't ask on an internet forum.

#2 - buy a book called "how to short the market" and read it over and over until you've lost the will to short

#3 - use a practice account with selftrade/spread-better until you've lost the will to trade

#4 - wait till the market has bottomed and just buy boring stocks and unit trusts and sit on them - until you feel the urge to short again. Sell everything, then repeat steps 1-3.

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If you can afford to lose, and be careful, with all the money slushing about it could get irrational; use an instrument like http://finance.yahoo.com/q?s=XUKS.L; or use a spreadbetting company and sell now, buy later - depending on how long you stay in and the duration of the contracts, your costs would be the spread @ each rollover.

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A W-shaped recession in this country would not necessarily make the FSTE index fall since much of the earnings and growth comes from overseas operations. If you think there will be a W shaped recession then you should bet on GDP growth or some other closely linked indicator such as manufacturing or services output.

hi, this is my first post. Can anyone tell me how to short the ftse index? i,d like to do this over a year period, whats a way to do it with the least possible risk and the highest possible return, i accept i may lose all the money i put in. i seriously believe there will be a w shaped reccesion. many thanks

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A W-shaped recession in this country would not necessarily make the FSTE index fall since much of the earnings and growth comes from overseas operations. If you think there will be a W shaped recession then you should bet on GDP growth or some other closely linked indicator such as manufacturing or services output.

time will tell i suppose, im of the school of thought that thinks were tracking the great deppresion, if im correct ,shares went on to tumble a further 75% . ive tried long term shorts with the bookmakers....cant find anything there, does anyone have anything positive to add?

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time will tell i suppose, im of the school of thought that thinks were tracking the great deppresion, if im correct ,shares went on to tumble a further 75% . ive tried long term shorts with the bookmakers....cant find anything there, does anyone have anything positive to add?

The only way I have personally used to short the FTSE is spread betting, which could minimise your exposure whilst maximising profit, IF you are very careful with your stops and risk management. If I were you I'd strongly advise you practice on a free trading platform for a while. I'd also read up a lot more about what is happening and actively search out contrary views to your own. Just because you think the market should fall doesn't mean it will. There are no guaranteed outcomes or one way bets, that I have come across.

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The only way I have personally used to short the FTSE is spread betting, which could minimise your exposure whilst maximising profit, IF you are very careful with your stops and risk management. If I were you I'd strongly advise you practice on a free trading platform for a while. I'd also read up a lot more about what is happening and actively search out contrary views to your own. Just because you think the market should fall doesn't mean it will. There are no guaranteed outcomes or one way bets, that I have come across.

I'm interested in doing this this week too.

How does it work. Does 0.01 count as a point or is it just the 0.1's we are betting on (if you catch my drift).

Also how do you set the stops? Do the stops not limit what you can make?

Thanks v much!

:)

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I'm interested in doing this this week too.

How does it work. Does 0.01 count as a point or is it just the 0.1's we are betting on (if you catch my drift).

Also how do you set the stops? Do the stops not limit what you can make?

Thanks v much!

:)

The stops aren't there to limit what you make, but to ensure that your losses are minimal. You might conclude correctly that the FTSE will fall 2,000 pts and place a bet with a spread betting firm at £5 a point to earn you a cool £10,000, but if the FTSE first climbs 3,000 points before crashing the you need over £15,000 in your account to cover the bet. You need to put stops in to limit your losses.

Spreadbetting sounds easy, but it is a quick way to the poor house unless you know what you are doing.

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As the man above said, it is £X per point. You place a stop to limit your losses and you place a limit to limit your profits (should you wish to). You also need to bear in mind slippage and the spread costs, if you are planning to play with a small account and minimal stops.

All the information you need about setting up accounts, how to use etc etc can be found on the relevant spread betting sites. Have a google and read around.

Best of luck

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As the man above said, it is £X per point. You place a stop to limit your losses and you place a limit to limit your profits (should you wish to). You also need to bear in mind slippage and the spread costs, if you are planning to play with a small account and minimal stops.

All the information you need about setting up accounts, how to use etc etc can be found on the relevant spread betting sites. Have a google and read around.

Best of luck

There is surprisingly little on google.

What is a point though?

Is it one decimal point?

Thanks,

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There is surprisingly little on google.

What is a point though?

Is it one decimal point?

Thanks,

http://www.igindex.co.uk/spread-betting/get-started.html

http://www.cityindex.co.uk/learn_to_trade.aspx

http://www.financial-spread-betting.com/

http://en.wikipedia.org/wiki/Spread_betting#Financial_spread_betting

I found it quite easy. You are being slightly dim or are on a wind up. IG Index and City Index are the ones off the top of my head. There are others, have a look yourself.

The FTSE is currently 5111 (about). That is 5111 points.

EURUSD is currently 1.4792 (ie 1.4792 Euros to the Dollar). That is 14792 points.

So for example, if I wished to short the FTSE at 5111 I would give an order to sell at 5111. If I wanted to stop my losses at 5150 I would require a stop of 39 points (I am ignoring the spread and slippage in this example). At £1 per point I would need £39 to place the bet. For each point the FTSE dropped from here, I would win £1. For each point the FTSE went up I would lose £1 to a maximum loss of £39.

Again the sites I have directed you to will explain all this.

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  • 4 weeks later...
  • 4 weeks later...

The only way I have personally used to short the FTSE is spread betting, which could minimise your exposure whilst maximising profit, IF you are very careful with your stops and risk management. If I were you I'd strongly advise you practice on a free trading platform for a while. I'd also read up a lot more about what is happening and actively search out contrary views to your own. Just because you think the market should fall doesn't mean it will. There are no guaranteed outcomes or one way bets, that I have come across.

If the OP was trying to long-short the market since October using spread betting he/she would be way underwater by now and subject to scarey margin calls. Spread betting is the last place to be if you want to take a long -term position on a market collapse. It could still be a year or two yet before the UK's chickens come home to roost and the current longest position you can take is a 6-month bet.

Buying shares in a 1x or 2x short ETF would make much more sense if you're confident of your play and don't care about short term 'paper' losses. That way you can hold your short shares for as long as it takes, regardless of market gyrations.

e.g.

SUK2.L

Try Hargreaves Lansdowne or similar for a cheap and cheerful buy/sell service.

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