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Skinny re. CMC. I think you can avoid the increased margin requirements at CMC if you register as a non-retail trader, which I have done. It was a fairly simple process. I thought all brokers would be affected as, apparently, it is due to a change in the law.
My thoughts over the market turning yesterday may prove to be wrong again.
The outcome of the margin changes for most Clients will be interesting as effectively it's going to cut down on index trading.
I'm wondering what the long term affects will be on stocks. Brokers appear to be taking different stances on the go live date. Some are going with you need new levels of margin on day 1, others are going with only new positions at the new margin.
I'm also assuming the negative balance protection means margins on less liquid stuff may be well above the guidelines.
I'm guessing it's going to push down anything below say £100m market cap which is popular with PI's.
I'm wondering if anyone has any advice on "coded trades". Small trades on illiquid stocks which can't possibly be real trades as the volumes are so low no-one would bother. I see them all the time.
A couple of examples from today.
CTO. A trade of 58 shares at 9:04:00. £48 of stock. It is my guess that this means one of the MM's wants to buy 5800 shares. But I'm not sure once it's been signalled what the purpose would be. It kind of matches the 3306+2332=5638 shares that have gone through this morning and would indicate someone wants to keep a flat book. There has been a known seller on this stock for the last three weeks selling at 81.2 is.
The timing of these small trades seems to follow other trades.
Another one.
PCF. Trade of 144 shares at 9:01:22. Tha'ts £58 of stock. No-one would bother (unless it's book squaring between MM and even then I don't think they would bother for that small an amount).