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07/10/21
10:35
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Originally posted by Tarvold:
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One alternative for the delay / issue with the algorithm is to short sell yourself into the market once you know your allocation via a CFD. I have an IG share trading account which I set up my own SPP at $5 per trade. Put in an application of $10K for ABB for which I have been allocated $1,800 (450 shares) Opened a short position for 450 shares via my IG CFD account at $4.86 this morning to lock in my profit. Net result will be: Investment 450 x $4.00 = $1,800 Gross proceeds 450 x $4.86 = $,2,187 Share dealing costs -$5 CFD open/close -$14 CFD interest (est) -$0.76 (close out 12th Oct). Net profit $367.24 % return allocation 20.4% % return application 3.7% (95.4% p.a.) OK yes the price could go up between now & when the shares hit my account but I'm happy to lock in a 20%+ profit. As the interest charge is so low it doesn't matter if I don't close out both positions straight away when the shares hit my account. The above doesn't take into account the IG margin requirement of 25% of the CFD position.
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The margin requirement on the CFD short position is 450 × $4.86 × 25% = $546.75. Plus you'd probably need another couple hundred dollars to cover any adverse price movement. I already have another CFD position open with excess funds which I can use to offset so I didn't need to fund the ABB position.