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     Coyotte
Rating: N/A
Votes: 0
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| | Sunday, July 28, 2002 - 05:36 pm: |  
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igindex.com.au
noticed this website in the sunday papers anyone have any knowledge about their methods
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the pope
Rating: N/A
Votes: 0
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| | Monday, July 29, 2002 - 12:26 am: |
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Took a look...talk about crystal ball/sceptre gazing!...but yes, i like..
how would this compare to just buying calls or puts?..insofar as outlay?...i guess you can minimise your loss with low bets..might beat horses!
grazie
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Riz
Rating: N/A
Votes: 0
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| | Monday, September 02, 2002 - 12:02 pm: |
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Yes i like this as well...
It is a bit like futures i guess..
they have three types of quotes (daily, 3month, 6month) with the 3month currently being sept quote, and the 6month currently being dec quote.
Now the way they work is this...they project the price of the equity into the future using a formale which involved the interest rate, and number of days left till your contract ends. The formulae they use is this..
formulae = (interest rate) / (days within yr) * (days till end of contract) * price
spread = midpoint * (spreadpercntg + guranteeRiskPrnctg)
And the spread percentage increases depending on the length of ur contract
1 day = 1%
3month = 1.2%
6month = 1.4%
+ 0.3% for guaranteed stop loss.
so for example.. if the market price is 500/501 (i.e. 500 bid, and 501 ask) then if u put that into their formule, The IG Index dec quote guranteed risk would be 507/508 +- 8. So they make money on the spread.
Others people comments would be appreciated here.
They way i see it..
its an easy way to short stock, leverage is good.
But depending on the amount u bet.
Say u bet $10 a point and the spread is $1, then thats equivalent to pay 10 * 100 = $1000 brokerage 4 u make any money.
Note: I found this out after many conversation with them over the phone.
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