I have £500 here sitting doing nothing, I am thinking of putting it into stock, specifically GKP.

They found oil in march and stocks doubled, and they now predict even more oil which means stocks will go up. Certain people I trust predict 300% within 5 years.

Worth a punt ?

 

Oil Exploration is one of the toughest markets to crack imho when it comes to investing...Look up DESIRE they currently have the Falklands contract..To give you an idea of there share price movement over the last few weeks they have gone from 50p to 1.30p and down to 45p.......

What your hearing is known in the trade as "Ramping" and its not unheard of in the Oil Markets...Unfortunalty for most private investors you get to hear about it too late hence why you now know the stock has doubled..

Best of luck

Edit to add your GKP graph for the last 12 mths

 

was just about to say! Desire petroleum!

 

broadmorr can u give us some more info? seems like u no wat u are doing!
we have been thinking about investing into glaxosmithkline 4 years, but never taken the punt.

 

With respect i'm not a financial adviser and would never comment on what you should or should'nt do ..There is loads of info out there in the form of books and stuff and in todays world there are loads of complexed trading platforms that allow you to get in much deeper than your pockets can cope with...CFD's and Spreadbetting blah blah

I'm from the old school of trading..ie i buy shares and sell shares..i work on a % of my stack and my trading day can be over @ 8.05am or last 3 mths

My only advice would be try and know your subject , never mind all that "only invest what you can afford to lose" as thats bollox.i'm ok for a few quid but i'd still jaw some fooker that owed me a pound note.

Best of luck

 

GKP lowest this year was 76.75 trading at 88.25 at the mo

I wouldnt put anything in to it myself

 

If you're looking to invest, then I wouldn't be punting!

Its picky, but worth noting the difference....

 

I looked at the Falklands stuff too - lots of interest and activity with the potential to turn nasty with the ongoing debate over who owns the shelf.

Desire seemed as good a bet as any for a small punt to sit doing nothing for a while.

My other recent punts have been into bank shares I have a few hundred quids worth of RBS shares when they were about 30p... I aint arsed and dont have the time to do anything other than take a punt on stuff and leave it to see what happens, couple hundred quid here or there every quarter.

If anyone reads this - I have some lovely NRK shares (another punt lol) which I obviously cant do anything with at the mo - any ideas what might happen when they sell the good part off?

J

 

Said while I was typing my reply, my punts are simply I'd piss the money up the wall or buy something I dont need and wont use - so I'd rather play with the money than stick it in a bank.

But I do get what you're saying Rich.

J

 

For Oil and Gas you need a friend who works in well testing who tells you the results before they get off the rig

 

Isn't that called insider training and a 'bit' illegal?

Wanna be my friend chop??? haha

 

That would be the Quality rather than the volume right? If its the volume then what car have you always wanted?

 

just a tad!

after you chop..... !

 

Probably but i'm certain people are at it! And no not me i haven't got a CLUE about shares! If i did i'd certainly be looking at the exploration rigs.


Not necessarily. They will have a "known" reserve but not until the well test will they actually get an idea of the actual well flow.


I've looked after rigs doing the exp work for little companies and have heard hot off the press whether things are good or not. I always wondered how this info could be converted to shares and hence £ but never did much about it

 

AIB bank stocks are worth a punt at the moment

 

Down 65% at the open last week. Very good example of what can and does very often happen.

The thing about buying stock in oil explorers before drilling news is that it's exactly as has been said here: a punt! It's a total gamble in every sense(apart from the fact that you're not technically gambling), because you really have no idea whether it will be good or bad news. You could say the same for trading any stock(that it's impossible to predict direction), but at least with the larger, more liquid stocks, you are able to use technical analysis, or even just a psychological number to manage your risk by setting stops.

For example, if you'd been out the day Desire opened down by over 60% and you had a stop at, say 85p, your stop would be triggered but your shares would have been sold at the best price available at the time. Just imagine buying £10k worth of shares one day and having that order triggered and losing £6.5k before you can even say "shit!". You can set more complicated stops that would mean the order wouldn't be triggered below a certain price, but I'm just highlighting the dangers.

So great potential reward, but very high risk. If you take a look at the stock market bulletin boards you'll a lot of posts on these hyped up stocks' threads by retards basically hoping and praying that a situation will come good or that they'll get lucky. It's the wrong way to go about things in my opinion. They're all telling each other what they want to hear, and that's exactly how an opinion of a company comes about without any basis in reality.

Also, without wanting to seem rude, forget the person you trust, the opinion of others counts for absolutely nothing in the financial markets.

 

Well at the moment All i have been doing is using bullbearings and making £600 every single day (in profit) but thats off £100k capital. If i divide that down to £1k capital which I have, that gives me £6 a day. Not even worth it is it !?

 

So in that volatile scenario would spread betting be a better option ? The problem with this is you can only bet £100 a go.

But for that you can set a STOP LOSS and wont lose much.

 

That isn't really enough capital, but I can see why you're attracted to these oil explorers with that money. It's possible to double your money in a day in some cases, but then again it's also possible to lose a lot of it.

What makes people money from the markets is money management. Say with these stocks you have £1000 to play with... and forget about trading costs for a minute. What a lot of people do with these oil stocks is take a punt, wake up one day and see the share price has risen 10% in a day, so they end up quickly taking the profit. So they now have £1100. But what they don't think about is what they will do if it heads the other way. In most cases they'll sit on the loss, hoping for it to recover, but there's chance it might never. Then they would just sell for, say, a £300 loss. Not a big deal really... it was a punt. But they're now down to £800.

Then next punt they take gets them another 10%. So they sell, pleased with the quick profit, and end up with £880. But what happens if they have another loser? They could end up with about £750 after the next punt. I think a lot of these people just gradually see their capital disappear in this way because they don't have a strategy.

What you need to be doing is looking for set-ups where you are risking x to make 2 or 3x. But to do that you need to cut losers and run winners, which sounds simple, but using your own cash will soon bring out the emotions that stop you from doing this! I really think all traders who make consistent money(that's different to investing) have a strict strategy, almost like a professional gambler, where they'd be risking 2-5% of capital on a trade for the chance of making 2-5 times that risk. With oil explorers, you really can't use these kind of strategies if you're trading on expected drilling results.

 

Well after buying and selling stocks and doing all sorts of things for a while, I now trade solely from a spread betting account, but I also don't trade those kind of stocks.

The problem with that is that if the spread betting company even listed the stock, the spread would be so wide that it wouldn't even be worth bothering about. But yes, as you say, you can set garanteed stops, but you have to make sure you select that option and of course you have to pay them extra for the privilege.

 

I know its only a game, but thanks to you i just made a £75k profit (£100k start capital minus fees and whatnot) by fantasy CFD trading on DES.

Not quite sure what CFD is mind, as I only made £7k on the same 100k using bullbearings "fantasy stocks"

Can anyone really simply explain what CFD actually is apposed to normal stock trading ?

 

Re: people working on oil exploration rigs and being the first to know whether or not a rig has struck oil - what aspect of the situation makes it illegal if they invest money as a consequence?

Does the law state that you must only invest money after a press release or something? I'm generally interested to know because I have heard of people in other industries speaking quite openly about doing similar things.

 

Yes. It would be illegal for, say, someone to act on information they've recieved from a friend at the company before it's publicly known by way of a news release. It's almost impossible to police though in my opinion, so it goes on a hell of a lot. How is someone supposed to prove that the person in question has spoken to someone in the know?

 

Exactly! Thats why I always assumed it was legal, because it would be pretty impossible to protect against it. Its interesting to know now that its actually illegal

 

Straight from Wiki -

"A contract for difference (or CFD) is a contract between two parties, typically described as "buyer" and "seller", stipulating that the seller will pay to the buyer the difference between the current value of an asset and its value at contract time. (If the difference is negative, then the buyer pays instead to the seller.) In effect CFDs are financial derivatives that allow investors to take advantage of prices moving up (long positions) or prices moving down (short positions) on underlying financial instruments and are often used to speculate on those markets."


The thing about CFDs(and spread betting) is that you can hold leveraged positions open on margin. So rather than buying £50k worth of stock, you'd be able to trade a £50k contract on, say, a 10% margin, meaning the margin requirement on the contract would be £5k. So in theory, all the capital you'd need in your account to trade the £50k contract would be £5k and something to cover any unrealised losses(which could be over £5k itself depending on how you did things). That would leave the account totally over-exposed, but you get the idea of what's possible. 10% margins and under are only for the most liquid stocks really. As you get outside the FTSE you'll see that change dramatically.

In the example above you could, in theory, wipe out the £5k required to keep the position open if the stock fell 10%. I'm guessing when you made £75k on Desire you were using way too much leverage for your account and, if things had gone against you, you could just as easily have lost £75k, or 3 quarters of your account capital to put it another way!

 

Yes it would.

Give me a shout and I'll set you up with an account at my place!

 

As Alan has described.

A CFD is essentially a form of future with no expiry. You hold a derivative of the underlying stock.

A spread bet is very similar, but you hold your position based on £pp (Pounds per point or whatever ccy you bet in), and it is in essence a bet on the movement of a stock.

Both forms are leveraged - in other words you only have to put up a small percentage of the consideration of the position in order to open it - this is your initial margin.

The key difference, and the reason we have so many large clients who hold spread bet accounts is that sb aren't subject to Capital Gains Tax, where CFDs are.