Mib 40 futuros investing in penny
Hoff thinks that might be a banner time in terms of new offerings. While the economic position is dire it is not disastrous and prompt and decisive action should win the day. Simon Denham, managing director of spread betting firm Capital Spreads, gives us his personal view. O NE OF THE problems for the markets is that, no matter what is announced, the effectiveness of sovereign cost cutting policies will not be felt for some little time, making snap assessments dangerous in the extreme.
On the other hand, expectations have become so immediate in recent years that time is one thing that politicians no longer have. A week seemed a long time in politics to Harold Wilson in the s; only 30 minutes can seem a lifetime to the current incumbents. If such inviolate areas as this are under the microscope, then it could bode well for the overall package, as the statement indicates that it is not just current expenditure that is being addressed but also the future burden of the public sector as a whole.
So much of the UK domestic market relies on the public purse that the effects of any government cuts will have ramifications well beyond the headline numbers. These people, in their turn, then rely on the services provided by the private sector. The income generated here is then spent again in an ever decreasing spiral. It does not take a genius to work out that the multiplier effect of that series of cuts.
If the tightening of purse strings was just confined to the UK economy we might be reasonably sanguine. The jury is still out on what the eventual effects of some of the budget cuts in Spain, Portugal, Ireland, Italy and Greece will be. However, it could be said that the incidence of all these nations acting the same way at the same time is risking a descent into a deflationary spiral. Actually, the vast PR machine of the European Union seems to have managed to put a stopper on the constant destructive speculation as to the indebtedness of its Southern members.
This has given the markets a welcome oasis in which to try to rebuild a bit of Euro confidence. Sadly, this state of affairs is unlikely to last. My forecast, made last December, for the year end was At the half way point we are pretty much back where we started it. Even so, the travails of BP could hardly have been expected and, without its decline, the market would be considerably higher. Corporate numbers continue to be on the side of the angels and recent economic data has been solid without being exuberant.
If it were not for the sovereign issue still weighing over our heads most analysts would be calling the markets extraordinarily good value. The vagaries of exploration for oil in difficult, deep waters, such as those found in the Gulf of Mexico, or having to work with new technology to exploit carbon resources in oil sands or shale, mean that the halcyon days of oil companies are well and truly over.
Nowadays the business is as much about cost efficiency and downstream diversification as it is about new and difficult finds. The repercussions of this latest and major Gulf of Mexico oil spill will reverberate for at least a decade.
Vanya Dragomanovich reviews the principal, short term concerns. As everyone now knows, a resulting explosion destroyed the rig and left 11 workers dead and a seemingly unstoppable geezer of oil emptying into the waters of the Gulf of Mexico. Until a containment cap was put on the well in early June, the well was estimated to have leaked between 15, and 20, barrels of oil per day.
The accident is now the largest environmental disaster in the US. Not only that, it did for BP, and the rest of the oil industry, what the credit crunch did for banks. It made them reviled by the general public. Actually, BP is not the only company this has happened to.
Remember the Exxon Valdez disaster. More recently, since , there have been fires and explosions in the Gulf of Mexico alone, according to the federal Minerals Management Service. As many of the shallower wells have already been discovered and exploited, oil companies have had to move to ever greater water depths to retrieve precious oil.
Invariably, these efforts have resulted in state-of-the-art drilling technologies; though sometime safety and spill containment procedures have struggled to keep pace with every more complex exploration demands. Photograph kindly supplied by Press Association Images, June In 15 workers were killed in the Texas City refinery and the subsequent investigation later found that the refinery explosion was caused by an allegedly lax safety culture and aggressive cost-cutting.
Ask any oilman in Aberdeen, the centre of the UK offshore oil industry, about the Gulf of Mexico BP rig incident and the vitriol kicks off. It must be stressed. There is no evidence that cost cutting led to this recent explosion, and an investigation by the US Department of Justice will probably clarify that.
So what does all this mean? One of the sharpest intraday falls happened when the company was reported by the Times to be looking into suspending dividend payments in order to stock up cash for the mounting costs of the spill. Absolute worst case? If the numbers were high enough it could lead to the company opting for bankruptcy in order to limit liabilities. If the company stopped all dividend payments and temporarily did not spend on capital expenditure capex it would be able to handle even the worst case scenario.
The blame game Vulnerable to a takeover? In the meantime though, the US government, and specifically President Obama, is holding BP directly responsible for the cleanup of the spill. Even so, the company might yet face a stream of civil or criminal penalties that could dwarf the immediate cost of the cleanup.
In fact, the litigation has already begun. BP is being sued by fisherman and shrimpers in the Gulf who claim to have lost their livelihoods. There are also a raft of claims from some of it shareholders on the grounds that the company allegedly failed to monitor safety on the rig and exposed itself to potentially enormous liabilities. Up to now, more than class action lawsuits have been filed. The Halliburton unit had completed the final cementing of the oil well and pipe just 20 hours before the blowout.
None of them is likely to make a move until it becomes clear how much liability would come with the purchase. However, there is not even a slim chance of that happening. Just how far US neurosis extends in this regard is exemplified by events in Even so, with a weakened share price BP is vulnerable to other slings and arrows. The disaster will have implications across the oil industry; for three reasons.
The administration brought in a six month moratorium on drilling in the Gulf of Mexico stopping work at 33 deepwater wells. Second, it will encourage fund managers to revisit investment approaches. Swedish bank Nordea recently said its ethical fund had sold off all investments in BP after the spill shifting the focus on a number of other ethical funds which still hold BP and other oil stocks.
Meanwhile, Oliver Crawley of Somerset Asset Management in London thinks that in any case pension funds need to tap into a source of income that does not have such large exposure to single stocks that are cyclical and capital intensive. It is not sensible right now to have too many eggs in the UK equity income segment. Third, the cost of health and safety will go up.
The industry has been battling to cut costs, but after Deepwater Horizon it will find it hard to oppose new offshore rules being proposed by an irate Obama government. Even so, in spite of these immediate concerns, it is likely that oil majors across the board will see minimal impact on their share value.
High income generation is a given over the medium term, and not only in the US. Wherever the car remains king, demand for gasoline remains high. Although shares in Exxon, Shell, Conoco and Chevron appeared to dip slightly in the aftermath of the Gulf rig explosion, more recently they are showing signs of stabilisation and of moving slightly higher. A problem for smaller firms It might however, be a different story for those small and mid-sized and companies in the underbelly of the oil industry such as drillers, rig operators and helicopter suppliers flying to rigs.
The cap over the broken BP wellhead is collecting more gushing crude day by day. On June 12th, the oil giant collected 15, barrels of oil and The first planned addition, to operate in addition to the LMRP cap system, will take oil and gas from the choke line of the failed Deepwater Horizon blow-out preventer BOP through a separate riser to the Q vessel on the surface.
Both the oil and gas captured by this additional system are expected to be flared through a specialised cleanburning system. Photograph by Dave Martin for Associated Press. Anadarko is moving three rigs away from the Gulf in response to the moratorium, putting them elsewhere to meet production goals; but it is a costly move. Moreover, oil services companies such as Schlumberger are keen to put as much blue water between themselves and the Gulf as possible; rushing to reassure investors that the spill will have little impact on them.
The firm has stressed that only 3. Transocean has not been held responsible for the explosion and is not paying for current clean-up efforts. However, in the aftermath of the clean-up and when class actions against BP come into their own, it is unlikely that BP will allow Transocean or even Halliburton not to be pulled into the proceedings. Royal Dutch Shell and Vodafone are now bigger. Although BP is widely regarded as a UK company, it has interests globally.
As exploration has become more difficult and expensive, firms such as BP have looked to improve margins. While under normal circumstances, financial caution would normally spur plaudits, it has had the opposite effect in the wake of the Deepwater Horizon blowout. More oil companies are exploring for oil in difficult, deep waters, such as those found in the Gulf of U Ratings under stress Ratings on the debt of oil servicing firms are under stress. Further afield, other companies have also come under the spotlight.
This may be the time to look into buying BP shares. Although they are far from being ready to recover there is likely limited down side as long as US consumers continue to buy oil at the same rate as they do now. There is only a small issue to consider: that of limited opportunities for investors to collect dividends over the near term. Mexico, or having to work with new technology to exploit carbon resources in oil sands or shale.
The company has also diversified downstream into the refinery business and own brand petrol sales outlets. Oil fields in the Gulf of Mexico are some of the most productive in the world; though in deep waters oil is much harder to extract. President Obama now appears to have banned new drilling in the Gulf of Mexico, following the Deepwater Horizon accident; though this is unlikely to be maintained over the longer term.
While OPEC cut production while demand contracted in the wake of the financial crisis, it is likely to respond to signs of growing demand as at least some of the major emerging markets look likely to rebound quickly through and The investigations into the Deepwater Horizon disaster are focusing on two crucial failures: what caused the initial explosion; and why a blow-out preventer BOP device did not block-off the well during the blowout, thereby preventing a leak.
On the floor of the Gulf of Mexico, a cap installed in early June over the gushing well was funnelling some oil 5, ft up to boats at the surface. The containment rate is expected to increase as engineers slowly close vents in the cap, raising the hopes that BP is finally making significant progress in its efforts to stem the underwater geyser of oil.
Algorithms are moving beyond cash equities, with futures and options trading using algorithms developing fast. TABB Group in a report last year called US Futures Markets: In the crosshairs of the algorithmic revolution estimates near-universal adoption of advanced execution algorithms within five years.
In April , Bank of America Merrill Lynch BofAML added six major European index futures to their algorithm offering during London opening hours, complementing their DMA futures offering already available, and is about to roll out further futures contracts in the US and fixed income markets for algorithmic trading. What does bode for traditional equity markets? Ruth Hughes Liley finds out. Currently, when the sell side produces a new algorithm, it can take several weeks supplying detailed documentation requiring coding and testing and working with vendor companies for the buy side to be able to see it operational on their desktops.
This saves having to build, or re-build a whole screen. It comes down to partnership. At one end, you can simply take a standard algorithm and tweak some of the parameters, but at the other extreme, at the more sophisticated end, we work closely with clients on simulators, on different scenarios to develop algorithms.
We call it quantitative consulting, where there is a relationship with the client at a deeper level where the client himself is extremely knowledgeable, often with a quant background. Most of the changes we see now are modifications to existing algorithms to keep up with the changing market place. Twelve to 18 months ago, we saw them going into multi-asset, multi-stock, now we are just seeing people enhancing and finetuning. Everyone is trying to incorporate more signals and features into algorithms.
Just like a traditional iceberg execution method, it will post one or more smaller orders to primary and alternative liquidity sources and use stockspecific statistics to route orders to venues where the best execution performance is expected. Abraxas dynamically want to trade using balances orders among the execution based most desirable market venues algorithms, at the other to take advantage of liquidity end is the high-speed, in both the dark and light high-frequency trader, markets.
Atwell says that early adoption of FIXatdl has been continual thing, making a unique position to maximise outstanding. Photograph kindly supplied by American Century continual decisions on fills in the venues where the Investments, June Some of these indications and signals are liquidity from 13 venues and is in discussion with more dark very, very short-lived and very, very subtle and to pick up pool operators.
At So algorithms which can incorporate dark and lit liquidity the more fluid end, the prop traders and so on, they have will become increasingly popular. The buy side still has to keep on watching it. We continue to offer clients tailored the human element in decision-making. One is the latency involved in executing orders and the other is the latency involved in modifying your trading strategies.
Traditionally it would take 10 weeks to build and implement a new algo. As speed increases, so has the need for anti-gaming technology, which Foster believes is absolutely vital. Indeed, the development of faster technology has supported the development of high frequency trading. Algo Technologies, for example, headed by Hirander Misra, former chief operating officer, Chi-X Europe, has launched ALGO M2, which takes 16 microseconds or 16 millionths of a second from the customer sending an order and receiving acknowledgement of trades, Independently verified, the measurement was based on sending more than , messages a second across multiple stocks and client connections.
Research and advisory firm Celent has identified what it calls the innovation pyramid, where technological innovations have supported the development of high frequency trading. The next layer is the development of algorithms to measure execution performance against benchmarks; then as some traders became more concerned with speed, direct market access services and direct strategy allow the buy side to take greater controls using basic algorithms; finally technology developed after regulation allowed the advent of ATSs in the US and multi-lateral trading facilities in Europe with the consequent development of dark pools.
High volatility High volatility encourages use of algorithms. When the Dow Jones Industrial Average plunged Firms should take this as a wake-up call. If a client has a definitive short term objective of how they want to trade a stock, it might be sub-optimal for them to use an algorithm with a high amount of discretion.
Especially if the algo were to use that discretion to react to a short terms news event which goes against the view of the better informed trader, conversely, when the trader has a limited short term view, they maybe very willing to allow the algo to use as much discretion as possible.
It has 93, professional users of its information. Last year saw big moves in white-labelling by the sell side, wrapping up their algorithms for other buy side brokers to use as their own. Peacock of CA Cheuvreux says it provides a mechanism for the middle range of brokers to have a product that they otherwise could not easily develop.
White labelling gives brokers without big budgets the mechanism to provide the product. If a client wants to trade with you, you have to have sales, brokers, DMA, algos and you have to provide all the touch points. Why would they spend millions and then give them to us. Why not use them for their prop desk to make money for themselves. It has taken fewer than 10 for algorithms to have changed the entire way in which equity markets have developed. When algorithms first appeared they were rulesbased and linear offering straight-forward slicing of an order either over time or by volume, using timeweighted average price or volume-weighted average price, according to Alexandra Foster, head of sales Alexandra Foster, head of sales UK, Instinet.
Photograph kindly UK, Instinet. Just successful performance. You have to keep focused on equities, as the market evolves demand for tweaking and honing your algorithms so that they can algorithmic tools that go beyond the traditional realm of deal with all the latest requirements. This has been driven With electronic trading now accounting for more than heavily by the presence of multi-asset class hedge funds. By according to TABB Group figures, awareness of new streamlining the process of algorithm alteration, an developments in this area is increasingly important.
It is yet to be seen been made, the question of which specific algorithm to implement then has to be addressed. The ability to rate how much power the buy-side will take from their sell-side counterpart. There has always been a symbiotic relationship between the buy side and sell side. In the last couple of years, there were trends that pushed the two closer together; and there were trends that strained that relationship. On the one hand, when the buy side experienced meaningful declines in assets under management and revenues, and some reduced internal resources as a result, they became more reliant on the sell side for research and access provision.
At the same time, the diminishing role of proprietary trading on the sell side removed some of the potentially antagonistic elements of the finely balanced relationship, and most of the firms on the sell side are clearly paying more attention to client flow and client relationships. On the other hand, counterparty risks, staff turnover and reduction of balance sheet availability caused plenty of dislocation in relationships during the credit crisis.
With the recovery, many are putting that phase behind them, but market and business uncertainties clearly remain. As a research-based consulting firm, our role is to ensure that we continue to provide timely and relevant market intelligence to management at both buy side and sell side firms to help them navigate their businesses. We trade exclusively in US equities and my primary focus is lowering our transaction costs. We manage large cap and small cap funds and our interest is in finding new technologies, new algorithms, new dark pools that can help us lower our costs and capture alpha.
As stock specific volatility has come down, so have our transaction costs, but the challenge continues to be to collect more and better transaction cost data in order to gain a better understanding of our costs. Pre-trade our investment process incorporates transaction cost forecasts and average daily volume data to influence our buy and sell lists. Post-trade we measure the market impact of all of our transactions against a variety of benchmarks. Specifically for us, arrival price and previous close are the critical benchmarks that determine our trading success.
My hope is that all of the fear and despair is behind us. Financial regulation is on our doorstep as well and that will certainly require tremendous attention. The mundane could simply be focusing on things like transaction costs, upgrading platforms and handling relationships. We are continually focused on adapting our equity trading platform, which includes our access to liquidity and the underlying technology that supports it.
Similar to others in the market, we have been very focused on the more recent changes in the trading and liquidity dynamic that has been evolving over the last two years. We have seen a massive change in how equities trade as well as the types of counterparties that are trading.
Understanding how to interact with all of this disparate liquidity, consolidate it, and deliver it back to our clients in a meaningful way is key to success in equity trading. This drives our development of new technology, products, and tools; such as algorithms, internalisation engines, and analytics; for both our traditional high touch and our electronic trading businesses.
The way to describe us is somewhat of an 85year-old overnight sensation. Yet while many people may not care much about the royals, they are just as indifferent to the idea of seeing them removed. As well as money, there is the question of power. Republic has set a target date of to see the monarchy abolished, an ambitious, but not impossible aim, Smith added. Queen Elizabeth, who celebrates 60 years on the throne in , is seen as such an entrenched part of the national psyche that she would be particularly difficult to dislodge.
Politician and constitutional expert Norman St John-Stevas gives the republican movement next to no chance of success.
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There is a sudden Bearish trend since the last week of February, and the MIB 40 Index reached the lowest value of Since March, the MIB 40 Index is still trying to gain momentum but see considerable swings; the index trades at The Bid price is , while the Ask price is The trading hours of the MIB 40 Index are from to The MIB 40 Index appeals to both traders and investors due to its wide trading volume, volatility, and long trading hours.
The trader tries to gain by speculating from the price difference from the opening of the trade to its closing. The trader has the option of using leverage while trading and trading in both directions. Using leverage means having wide market exposure and the ability to trade a large position by depositing a small initial amount.
Trading in both directions means a trader can speculate on both Bullish and Bearish trends. A trader can go Long while predicting an upward trend and go Short when speculating a downward trend. Trading CFDs give an opportunity to magnify the profits, but there are equal chances of losses, so a risk management tool must be used to avoid financial losses. What causes the price change of MIB 40?
The macro-economic factors and individual performance of the listed companies play a crucial role in determining the value of the MIB 40 Index. The share price of a company matters along with the economic growth and stability of Italy. When the domestic politics, regional politics, and weather patterns are calm, then the MIB 40 Index will perform well, and in economic crisis and political instability, the MIB 40 Index tend to lose points and see a Bearish trend. Trading volumes in penny stocks are very low, with few buyers or market makers.
You may be making profits on paper with penny stocks, but you might not be able to realize your gains. Micro-investing apps like Acorns and Stash let you easily invest in the stock market for a small monthly subscription fee, in fractional shares as well as exchange-traded funds ETFs. Large brokerages, like Charles Schwab and Fidelity, and smaller disruptors, like SoFi and Robinhood, also offer fractional shares. Skip the penny stocks. Investing with these more tried-and-true methods is what experts recommend for most people looking to build wealth.
Decide how much you can lose. Yes, penny stocks are that volatile—occasionally spoken in the same breath as cryptocurrency. Set aside an amount and avoid putting the bulk of your savings into these unpredictable holdings. Stick to major exchanges. The liquidity offered on these main exchanges is also much better than the OTC market.
Do your research. Professional traders like Look out for fallen angels. These could be otherwise solid companies that have stumbled on bad times. Be conservative with fees. Watch out for the letter Q. There are low-priced alternatives to penny stocks that will allow you to start investing, without having a large sum of money. Was this article helpful?
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