Plus500 Share Discussion Threads

[sailing john] 16/12/2017 18:17

Thanks fo ESMA update PL
Most are little or no change for PLUS
The leverage restriction of between 5:1 and 30:1 is quite severe
Current leverage Indices and Forex 300:1
Commodities 152:1
Shares mostly 10:1
Options (supervolatile) and already at 5:1
Cryptos vary but already 5:1 or less for Cysec
Perhaps PLUS will introduce an option of Professional Trader Status to extend leverage for regular traders?
This is all mostly priced in so no idea whether market reaction will be positive or negative (my guess positive as could have been far worse eg total marketing ban or product ban as for binaries but MR M might judge leverage reduction as severe and mark stock down...... in other words I haven't got a clue! )
GL SJ

[xajorkith] 16/12/2017 17:58

I'm with shaker44 on this.

I would be very surprised if such a large, (apparently) well run company would expose themselves to such losses as outlined & would have expected brokers to factor this into their forecasts if so.

With a complex, opaque industry like this, analysis can only go so far imv, and can sometimes be way off (Q3 revenue predictions?).

I may of course be way off myself, but on 8.3 forecast earnings & a yield of over 7%, I will continue to hold until the next update, which I await with optimism.

DYOR/GLA......

[planelondon] 16/12/2017 17:41

ESMA update:

[shaker44] 16/12/2017 17:06

So are you assuming that losing clients have left Plus with bad debts? If you are, is there evidence of that? And that any loss is significant?

[aakash30] 16/12/2017 15:56

The issue is their exposure prior to them reducing contract sizes and increasing overnight holding costs.

>90% of their clients were long when bitcoin was much lower and contract sizes were much higher. The futures market has just come about but they likely didn't hedge much of it at the time and given they offer limited loss accounts likely can't fully hedge their book as has been mentioned before.

Hard to quantify what effect of that would be on Q4 but I would say definitely more negative than positive.

[shaker44] 16/12/2017 02:05

I just don't share this crypto concern. It would be astonishing if they were so amateurish to take on crypto business without effectively managing the exposure.
I mean, why would they??!!
They will be monitoring them very very closely of course, and in that market there is a good supply of sellers who think e.g. Bitcoin is too high, and those who believe it is heading for usd$20k. No reason to let their book get unmatched, and now they can use the futures market if necessary.
I believe it is a low risk, high reward market for them.

[riverman77] 15/12/2017 22:56

I've also been concerned about the potentially high exposure to the cryptos and been mulling over whether to sell out. However checking this evening, the max position I could take on bitcoin is now just £250 and this needs a pretty hefty upfront margin. The positions also automatically expire within a week. As it currently stands I can't see how the company could be that exposed. Of course it's possible that they may have previously incurred losses, but I would imagine they're pretty adept at managing their risks. On balance I'm willing to keep a small position here as the potential upside is very large.

[metis20] 15/12/2017 17:18

In view of the high volatility of Bitcoin, these sections from the PLUS500 user agreement may be of interest -

14.4. You acknowledge that the trading of certain Instruments on the Trading Platform may become volatile very quickly and without warning. Due to the high degree of risk involved in trading volatile Instruments, you acknowledge that we may close all or any open Transactions with respect to any Instruments that we determine, acting reasonably, are volatile, at the price quoted on the Trading Platform at such time without notice.

16.1. We may, in our reasonable opinion, determine that a Force Majeure Event exists. A Force Majeure Event will include, but is not limited to, the following:

16.1.3. the occurrence of an excessive movement in the level of any Transaction and/or Exchange or our anticipation (acting reasonably) of the occurrence of such a movement;

16.2. If we determine that a Force Majeure Event exists, we may without notice and at any time, acting reasonably, take one or more of the following steps:

16.2.1. alter your Margin requirements; which may result in you being required to provide additional Margin;

16.2.2. close all or any of your open Transactions at such closing prices as we reasonably believe to be appropriate;

[stephen2010] 15/12/2017 11:14

Check out ALBA. Huge multibag potential.

ALBA currently trading at 0.39p target price 6p making a nice 15 bagger. Please read the following:

MARKET CAP PUZZLE
❖ Alba (market cap £8.4m) is in a resources neighbourhood populated with listed
companies with much enhanced market capitalisations, such as UKOG.L (£134m) and
JAY.L (£172m). With either shared project interests or adjacent tenements to these
companies, Alba should trade at a much higher valuation than its current token value.
Like Bluejay, Alba owns 100% of its ilmenite project. Direct comparisons with UKOG
are also instructive. While both companies own other projects, UKOG’s 49.9% of Horse
Hill Developments Limited (HHDL), when compared to Alba’s 18.1% means that Alba
has approximately one third of the value of Horse Hill compared to UKOG but only
about 7% of the market capitalisation. Once the market recognises these disparities,
the room for growth in Alba’s share price is undeniable.

VALUATION RATIONALE - Our valuation in this First Equity Limited initiation note
uses a risked valuation approach for Alba’s two main projects, at Horse Hill and TBS. The
Horse Hill licences are valued using independent published technical data from
Schlumberger, Xodus and Nutech on the oil potential of the licences, along with our own
assumptions on recovery rates, oil discovery value, resource and development risks
factors. From this a risked value of $127m net to Alba on a ‘Base Case’ basis is derived
for Horse Hill.

Given the similar geology and economic potential of both TBS and Dundas, we have
adopted a risked closeology valuation approach, by computing an NPV for Dundas of
$223m and then applying a three-tiered risked probability calculation to arrive at a value
of $54.7m for TBS. Once Alba announce its JORC resource and exploration target at TBS
and Bluejay its Feasibility Study results, this number is likely to be revised upwards very
rapidly, possibly up to $200m, representing up to 7p per share in additional shareholder
value.

We compute a valuation of $185m (£139m) for Alba, equating to 6.0p per share, of which
4.1p is attributed to the stake in Horse Hill, 1.8p for TBS. Given this analysis and wealth
of valuation catalysts anticipated across the project portfolio in the coming months, we
recommend the shares as a ‘BUY, with a Target Price of 6.0p, representing a potential
15 times plus uplift from the current share price.

[poolefox] 15/12/2017 11:13

SJ ive done the same sold 2/3rds at 10.40 and just sold the balance at 9.43 with similar concerns.Im looking to buy back once the regulation and results are announced and if I miss the boat so be it.It was my largest holding

[alan00] 14/12/2017 21:45

SJ - just on your point about if it would be possible for Plus to hedge crypto exposure. In theory, given the net exposure is generally long they could simply buy the actual crypto's. They would however need to fund these purchases somehow, and obviously be careful with the risk they could be stuck in them after customers have closed positions. Given the company is very capable technologically, I would have thought they wouldn't be too daunted by the prospect of buying crypto's directly. However I don't know if they would actually consider this, or do this. More recently Bitcoin futures have launched which could be an easier way to hedge for that currency.

[basem1] 13/12/2017 15:22

A fair assessment SJ, financial preservation is key even if you miss some profit.

[sailing john] 13/12/2017 14:34

For info (and as I posted my buy trades from Jan and Aug) I'm currently out having thinned out then sold my final holding when Bitcoin took off about two weeks back.

Very reluctant to let go and hoping to jump back in but I'm unable to model the impact of the Crypto surge and I don't do risk especially with an overweight position.

On the plus side I'm expecting a significant increase in new and active customers for Q4 perhaps even 50k (the typical run rate of new customers 22-25k/quarter increased to 32k in Q2 and 42k in Q3 probably due to Cryptomania which has increased in Q4 judging by press and other news sources following the rise in Bitcoin price.

But there has been an apparent imbalance between Crypto long/short positions that is not easy/possible? for PLUS to hedge? They have taken prompt action reducing contract sizes leverage and duration, increasing spread and premium on the long side (whilst reducing premium on the short side) There have been a few flash crashes over the past few weeks but with reduced leverage and most Crypto punters in profit they might not have led to a high percentage of margin calls / position closure. IGG have closed their long book for Cryptos some time back.

So in summary I think PLUS will have taken a P&L hit (offset by a significant upside on spread and premium) but I'm unable to model or even guess the magnitude. Might be insignificant/worthwhile as cryptos probably giving a free source of new customer acquisitions that in the past might have cost $1k each.

Hoping to get back in when I can see the impact, if any, either after a TS Jan or FY Feb. It has been quite difficult to step aside of what I still perceive as one of the best value shares and a well run company.
GL - SJ

[bargainbob] 12/12/2017 17:22

Help get others plusonecoins thread

[aakash30] 11/12/2017 15:45

Thanks Metis. That's great news. I think futures liquidity will actually lower volatility due to increased price discovery.

[metis20] 11/12/2017 10:24

todays RNS



Grant of operating licence in Singapore

Plus500, a leading online service provider for retail customers to trade CFDs internationally, is pleased to announce that the Monetary Authority of Singapore has granted Plus500SG Pte. Ltd. a Capital Markets Services licence for dealing in securities and leveraged foreign exchange trading.

The grant of the Capital Markets Services licence reflects the scalability of the Company both from a business and a regulatory point of view and is in line with the Company's strategy to add new licences in order to expand its customer base globally and diversify its geographical revenues.

This licence adds to the Company's existing jurisdictions, being the United Kingdom, Australia, Cyprus, New Zealand, Israel and South Africa.

Asaf Elimelech, Chief Executive of Plus500 said:

"We are delighted to be granted this new licence in Singapore as we continue to expand globally and increase our potential customer base. Plus500's international brand awareness has increased significantly during the last few years and thanks to the new Singaporean licence the Company will be able to continue this positive momentum."

[shanklin] 11/12/2017 07:55

Background info re PLUS business model...

[cfro] 10/12/2017 17:16

The futures go live tonight at 10am i understand so bitcoin likely to get much volatile.

Should help PLUS.

[sailing john] 10/12/2017 16:00

PLUS have added IOTA over the weekend

And have created a brand new Crypto product - Ether/Bitcoin.
Play the combined movement in opposite directions!
A clever idea if it interests investors - assuming that Ether and BTC generally move in different directions it effectively adds leverage (might have value where leverage capped by Regulator - eg Cysec 1:5 for Cryptos)

[poolefox] 10/12/2017 01:25

Huge volatility in cryptos limit exposure encourages multiple trades

[riverman77] 09/12/2017 18:02

Yes I got that too. Just checked on demo account and the max bitcoin stake is currently 0.2 or about £2000. This seems pretty cautious and hopefully means the company won't be too badly exposed if there are further big price swings.

[poolefox] 09/12/2017 17:56

Plus just sent a text on Bitcoin “buy sell or hold down 15.93%” actually down 17% now

[travellingtrader] 08/12/2017 08:37

IG make their book short/close only when a big rise happens.
PLUS reduce contract size and up premium and spreads on both sides.
So it's easy to see why IG would have a more balanced book now as some of the longs would have closed and shorts can continue to be added.
When both sides of the book are open IG also end up with almost everyone long.

[aakash30] 08/12/2017 07:49

interestingly IG clients are a little more balanced. 33% short