Analysis Ibex 35, DAX, SP 500, EURUSD. Europe returns to the red

How to take advantage of the opportunities in this market? Operational example.

To illustrate how to trade in the example, we are going to use the Ibex 35. At IG, we could trade in this market with CFDs, barrier, vanilla options and turbos24. We are going to select the latter for the example, since it is a product that is quoted on a 24-hour market, which allows us to adapt the leverage of our operations and be covered against market gaps. Also, the turbos24 have no commissions.

In this case, the minimum contract size would be the purchase of a long turbo24 or a short turbo, which equates to 0.01 euro per point. For our example, which in no case should be considered a buy or sell recommendation, since it is not its objective, we are going to select the amount equivalent to 1 euro per point, that is, one hundred turbos24.

In the event that the first scenario is confirmed and it is decided to enter bearish, we would buy one hundred short turbos24 at an index price of 7896 points. We could put the knockout level, for example, 120 points below the entry price (7896 + 120 = 8016 points). If at that time, the price of the turbo, let’s imagine, is 1.2 euros, the requested guarantee (compensation) will be 120 euros (100 turbos x 1.20 euros for each turbo). The leverage of this operation would be 65.8 times (€ 7,896 / € 120 = 65.8), maintaining all the advantages previously explained and the protection against negative balance in the event of bear market gaps.

In addition, it has the advantage that, if there are increases in volatility when the market is closed that trigger our knockout, the operation does not close. This implies that, if the cash market opens in favor of our direction, we will continue to be inside and we could continue to obtain benefits. If, on the other hand, when the market opens it does so at a price equal to or higher than our knockout price, the maximum loss is guaranteed to that amount initially deposited, so we are hedged against bullish market gaps.

In the event that the second scenario is confirmed and it is decided to go bullish, we would buy one hundred long turbos24. Let’s imagine that the Ibex is trading, for example, at 7936 points. We could put the exit or knockout level (guaranteed stop), for example at 120 points below the entry price (7936 – 120 = 7816 points). If at that time, the price of the turbo, let’s imagine, is 1.2 euros, the requested guarantee (compensation) will be 120 euros (100 turbos x 1.20 euros for each turbo). The leverage of this operation would be 66.13 times (7,936 / 120 € = 66.13).

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