Plus500 Share Discussion Threads

[simplethesis] 09/11/2020 17:17

SJ - IG was again toast today - just not working.

[wm2020] 09/11/2020 16:58

I always thought he was a city banker, guess he still is!!

[ukneonboy] 09/11/2020 16:52

Hey, Good Afternoon ELCAPITAL "LOSSES" how's it going in the fabulous tax haven of Benidorm !!!

So in case anybody didn't know, "Mr Blue Button" is basically a former trainee / junior Back Office Settlement clerk that worked for a little known Stockbroking firm back in the 1990's and he has now resurfaced again here on ADVFN. The term "Blue Button" simply refers to the fact that "trainees" were required to wear a Blue Button



Sr. Blue Button, cómo está? Perdiste dinero hoy?
Por qué te fuiste sin decir adiós?
sigues diciendo mentiras ?

[sailing john] 09/11/2020 16:23

As many have said their most popular instruments have been more balanced long/short recently. And there has been a mix of reactions today with indexes obviously moving up (but only FTSE appears to be net long 67% down from around 85% last month on second wave worries) and in Commodities the oil move is offset by a fall in precious metals (gold, silver)with cryptos also off a little after a good run (in precious metals and cryptos - customers appear mostly long)

Also trading volumes have been massive today such that EQI (share trading) was so slow that it was almost impossible to place a trade and reports elsewhere that Hargreaves having even more problems. I have been on PLUS today and no problem getting quotes/placing trades so great to know as always that high volume doesn't appear to affect performance at PLUS.

SJ

[simplethesis] 09/11/2020 16:02

rHatton - you're wrong on the June RNS. From 27 April, the previous RNS, to 5 June, market moves were as follows:

DAX +21%, UKX +11%, S&P +11%, Nasdaq +11%, WTI +209%.

[barryharmer] 09/11/2020 16:01

Good timing, dividends should be paid in a few days, we have got a discount on reinvestment.

[sailing john] 09/11/2020 15:57

Looks like El Capital is back again!!! now as RackTP6
More posts about Rack..ers and tents no doubt, all day everyday.
Filtered

[jamessmith23] 09/11/2020 14:31

It's true, and I don't think customer pnl will be immaterial by any means, but it has been 1% for the last 7 years when there has been a strong upmarket. Pretty sure the RNS also said it should revert to a medium to long term level of 0, so if you are holding for the medium to long term it shouldn't matter.Guess it depends on your time horizon at the end of the day.

[rhatton] 09/11/2020 14:26

Clearly not every user is long, however look st the RNS we received in early June about strong upward market moves. The one today has been larger and no doubt broader.

[jamessmith23] 09/11/2020 14:17

You make it sound like every Plus user is long indices, it shows you on the website what the split is and for all indices except for ftse 100 they are pretty even, ftse is two thrids long.If it was 70/30 long/short on all indices I would be worried, but it isn't, yes they'll be a hit from customer pnl this q, but it's reversed every time before, and if equities continue up then there is always a correction, that's how markets work. Its the short term picture vs long term picture, I'm more fussed about longer term which is that this attracts new clients and pnl is sub 1% long term. If it drops to the 1300 level I will top up, as plus benefits from volatility, which we are seeing a lot of at the moment.

[rhatton] 09/11/2020 13:51

Maybe so but ultimately CI doesn’t necessarily drive profitability surely? Yes historically CTP has been close to 0 but what happens if the markets go on a tear from here?
This looks like its heading to 1300 or lower
Any hope of £17+ before results long gone I’d say

[simplethesis] 09/11/2020 13:43

The company has been smart. They left expectations at only $50m revenue when their customer income is likely to be at least $120m more than that. They built in the possibility that CTP could be good for customers, perhaps driven br a risk assets rally post the US election.

The key thing is that even if they suffer a short-term hit from customer trading performance being very strong, they will tell you the customer income at the same time. It's the customer income that matters for next year.

[rhatton] 09/11/2020 13:04

Ultimately it will drive more people to come to the markets and trade no doubt which is a positive

[jamessmith23] 09/11/2020 12:52

Customer pnl from being long indices which have gone up, but looked into it as mentioned below.

[intelligentinvestor1] 09/11/2020 12:41

Any idea why sudden 5% down ?

[jamessmith23] 09/11/2020 12:41

Interestingly only the ftse 100 is the index that has more longs than shorts, pretty much all other indices were split evenly, and so market moves shouldn't make a huge difference.We'll have to see how it plays out, could see volatility short term in the share price, but over the long term customer profit pnl has been less than 1% of revenue, and so makes up max 2% of profit/loss. If it drops much lower it'll be a buying opportunity, as long term it will reverse whichever way it goes, it always does.

[rhatton] 09/11/2020 12:15

Be an interesting day for customer pnl. Incredible moves up.

[simplethesis] 04/11/2020 18:26

The company is incredibly reactive. At any moment they can widen spreads and reduce leverage if they want to close down risk. They hardly ever want or have to do so, because the daily reliable spreads and overnight charges income is so great. They can do so if they want to, however.

[chucko1] 04/11/2020 18:25

Of course they could. Does that worry you? Then stick to Gilts.

[rhatton] 04/11/2020 17:47

Could plus theoretically make a loss on a quarterly basis if client performance was that good?

[sophia1982] 04/11/2020 08:58

ST,
many thanks for your thoughtful response.

[simplethesis] 03/11/2020 17:28

Can anyone explain in plain terms which kind of volatility benefits Plus?

Volatility is good. Specifically, big daily trading ranges are good.
High VIX clearly good for equity indices and single equities.
Clients tend to be net long equities, particularly, but also indices. As Plus500 does not hedge externally, as it is, that means that they have tended to benefit from market declines and suffer, in the short term, from market rises. Examples would be Q4'18 and the market rebound in Q1'19, also Q1 this year and then Q2.

Volatility happens for a reason, which typically means that event-focussed newsflow picks up, to the extent sometimes that it "cuts through" and provokes others to think about trading. Newsflow drives new clients, then volatility drives trading velocity and customer income.

Note that this language about up/ down markets and Customer Trading Performance is all short term. In all cases, whether IG/ CMC/ Plus500, the platform is principal to the trader. In the case of Plus500, as there is no external hedging, if their book is net long equities and those markets fall, they make money immediately as they are the other side of the trade. This was however money which would otherwise have come to them over time through spreads, as the customer continues to trade. hence this is a timing issue. The other way round, if a customer makes money, on a gross basis, then they are likely to trade more and in greater size because their account is flush. It's important to understand that CTP and CI are a disaggregation of revenues. All that matters in the end is those revenues, which have averaged to a quarterly ARPU of $1006 since the start of 2019, or $1044 ex CTP. ARPU in the first three quarters of the year has averaged to $1220, which means that the rate at which customers' money has been flowing to Plus500 has been elevated, but only by 20%.