rather than pick out individual stocks to trade, it can often be worthwhile to trade the indices themselves, especially in times of high volatility.

for those so inclined, i attach below charts for FTSE and FTSE 250, though one might equally be tempted to trade Dow or S&P, which is significantly broader in its coverage, or even NASDAQ

for ease of reading, i have attached 1 year and 3 month charts in each instance

Here's a bit more info from IG. I have heard about 'Dividend Tuesday' so we should watch out in future! If you search on Google for that phrase you'll find loads of info.

What happens when a stock or index goes ex-dividend

When a company goes ex-dividend (that is, they pay a dividend to shareholders) the value of the share will generally fall by the same amount as the dividend. Since a stock index is made up of a number of companies, the fall in value of the shares will also cause a fall in the value of the index.

Why we make the adjustment

When the price of a stock or index drops after going ex-dividend, your running profit & loss (P&L) is affected. If you’re long, this means you miss out on potential profit. If you’re short, this means your P&L is better than it should be.

Given that the drop in price is an expected market movement, we must make an adjustment so that your P&L is not affected.

How we calculate the dividend adjustment

Adjustment = size of your position x dividend amount

The dividend amount will vary depending on the company or index. We usually use the dividend amount listed on Bloomberg.

When dividend adjustments occur

For the FTSE 100 we adjust our price on most Tuesday afternoons; some weeks there may be no adjustment needed. For the Wall Street its ad-hoc, so it could be every day.

Discussed accross the road on FX thread most weeks skinny.

With large companies such as 3M Co, Boeing, Chevron, Du Pont going ex-Dividend our adjustment factor was 22.92 for every £1 per point position.

If you have any further questions, please do not hesitate to contact us....


Caught out

Thanks Iain

Today's most important factor will be the US Retail Report at 13:30 (UK time):

'Economists polled by MarketWatch are estimating that retail sales were flat in January, versus a rise of 0.5% in December. It’s the first report to be released since taxes for millions of Americans rose. Markets are expected to be sensitive to any number that veers far north or south of projections.'

South for today please :-)

Skinny, DFT funding in my CityIndex account is applied at 22:00. In all honesty I've never bothered to try and workout when and how much this will be as there only applied to DFT trades not futures.

Shortie - as posted above, mine was also applied @10pm.

@19 x stake.

I'd either forgotten about it and/or not taken much notice before.

As I said, there are some big FTSE ex dividends today.

USD Core Retail Sales m/m 0.2% consensus 0.1% previous 0.3%

USD Retail Sales m/m 0.1% consensus 0.1% previous 0.5%

USD Import Prices m/m 0.6% consensus 0.8% previous -0.1%

Thanks Skinny. I could do with a nice drift south!

pretty much as expected though

Been stopped out now - and lost all the profit I made last week dammit. You can be pretty sure that 6360 is today's top!

Think I'll go out and play in the snow!

Good gracious - the FTSE just carried on going!

i have been exposing myself again .....

but not in the garden with Toya, but on C+M sector index .... fortunately i have not caught cold at all, but am currently basking in the glow of some juicy success .... and have taken the precaution of now implementing a very tight stop, so if the rise is too frothy, i'll still retain nearly all the profit

skinny - sorry to be dull, but can you remind me of the "code" for this and also for HG+HC so i can have another look at their respective charts

Your not alone Toya, FTSE rally today has also cost me plenty.....

Oh dear - Sorry to hear that Shortie. Maybe we should have taken heed of the date, though I'm not normally superstitious!

Cynic: a bit too cold up here for exposure, even with the thaw setting in

just been stopped out of C+M, but do i care? ...... do i look like it, as i go whooping round the supermarket in a bright pink wig?

FX CHAT: Sterling needs to be a lot weaker to boost UK exports
If the UK wants to use a weaker currency as the lever to support its economy and exports, the pound is going to need be a lot weaker, says Steven Englander of Citigroup. The pound needs to be below $1.50 and the euro needs to be above GBP0.90 "in order to have a significant impact on exports," he says. BOE King's comments that the central bank is in no hurry to tighten policy, even in the face of above-target inflation, is a big shift, Englander says. It would make the Bank of England the "first central bank to walk away from an inflation target" and is similar to a late 1970s, early 1980s central bank view, he says. The pound is at $1.5563 from $1.5661 late Tuesday, according to EBS via CQG. The euro is at GBP0.8648 from GBP0.8593.

WOS on a mission

The only problem with trading this short term, is the 20+ point spread.

thanks skinny - you're a * ..... have just entered those codes in my notebook, so there's a chance i won't lose them so readily yet again!

but NMX2350 (red below) has a spread of only 7 or 8 and is almost as volatile




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dow certainly seems reluctant to hold above 14,000, but it's quite a bold move to short it without careful monitoring ...... nevertheless, it is pretty tempting, not least because VIX shows "extreme greed" at 87

and while i was gibbering on the phone, dow dropped 25 points, but have still shorted at 13966 with 100pt stop