Get into work, hung-over, and this guy who sits opposite me tells me he’s made a 6k loss on the markets this morning. I’m staggered, he punts his own money here and there makes a 100 quid, 2 if he’s lucky.
Turns out though he’s moaning that he closed off half his bet last night, and if he hadn’t he would be 15.5k up instead of the nearly 10k he’s made overnight on a £100 bet.
Yesterday at close, he bought Lloyds £100 a point spreadbet at a price of £2.37.
In his own words:
“After close the FSA announced that from today short selling in financial institutions is banned. As Lloyds had been systematically shorted by hedge funds I could look forward to an increase in the Lloyds share price as the hedge funds would need to buy to close their short positions.”
At 9pm, he closed out half his position for £1,6450.00 profit.
“As the markets opened at 8am next day I needed to use my laptop on the train (with mobile broadband) to close the other half of my position. As I logged on Lloyds shot up to £3.94 so I closed for a profit of £7,850 on the other half of the trade.”
It’s all luck though, he had no idea that the FSA would cancel shorting, forcing hedge funds to buy to cover their positions.