Arthur Buchner: Nedcor Securities


BROADCAST TRANSCRIPT: Arthur, platinums took a pounding today. Has this hurt the single-stock futures, and particularly our portfolio?

ARTHUR BUCHNER: Well, not our portfolio because we cut.

MONEYWEB: Thank you very much.

ARTHUR BUCHNER: Basically into the futures closeout on Thursday we saw quite a lot of strength on the three or four days. And when you get 10% movement in the market, and really, the Alsi was up 10% from its lows of 7000, futures are exactly that. Take your 10%. In terms of gearing, it works out at 100% on your money, and that’s one of the things that we didn’t do on the portfolio where we’ve sat in it, it’s been wrong. We haven’t cut it and said, listen, we will look at something else, or we will look at it a little lower down. We’ve taken a fundamental view, we’ve taken an asset-managers view at it. And we need to change that. We need to say, we are punters, we’re in, and we’re out. And so, on Thursday into the closeout, we cut our Amplats position, thank goodness.

MONEYWEB: What would you have lost today? I mean a 5% fall in the share price today turns into what?

ARTHUR BUCHNER: I think we had 200 shares and they were down, from where we sold them, about R23. So that’s R4600 and it’s a really small investment. If you think what the 200 shares cost us in terms of our margin, I think we were in for R20,000 margin. So R20,000 margin we lost R4600 if we held on to the position.

MONEYWEB: One day.

ARTHUR BUCHNER: It’s literally one day. But of course, you could have shorted Amplats, and you could have made the R4600. It gives you the option of going short and long. But – you have to be stop-loss-orientated, first of all. And, when you get into a trade, you get into a trade for a reason. It’s going up, I’m buying it. If it’s not doing what it’s supposed to be doing, cut it. It costs you very little to get in and out.

MONEYWEB: All right, so you cut. In the futures closeout you got rid of the Anglo Platinums, the Anglo Americans. That’s not too far out the money.

ARTHUR BUCHNER: No, they’re holding. I think we got into the money last week. I was very keen but then I thought, if I had to cut it as we get straight into the money, then it’s really going to run. So we will hold on to that one and see. Actually, it was up very strongly on Friday when we had the public holiday – it would have great to be in the markets on Friday. I think half of the bulls are really upset at the fact that they missed it. But it’s holding well and on that one I think we’ve been close to in the money, we haven’t been really out the money. The platinums just got a little bit overdone.

MONEYWEB: How is the war affecting demand for futures in the South African market? If at all?

ARTHUR BUCHNER: Our volumes have increased 20, 30% in the last, I would say, two months. Today was fantastic. Today was the first day after closeout. It’s normally quiet, all the traders leave. No-one is around, there’s no gamma plays on the options, etc, because of the long way to go to expiry. And we traded 20,000 contracts, which is about double our normal daily volume the day after closeout.

MONEYWEB: The market is certainly picking up.

ARTHUR BUCHNER: Well, there’s interest and guys are looking at the geared aspect of it. And they know – cheap, in and out.

Posted in Market commentary

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