Overnight Fees + My Life as a Panic-Selling Over-leveraged Noob
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- Опубликовано: 14 окт 2024
- Copytrading : etoro.tw/2jBG9pO
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In this video, I talk about the basics of overnight fees and weekend fees (with a little hint about how that affects trading on Etoro - buy positions on stocks don't incur overnight or weekend fees. There are some other exceptions too - check the fees page on the site for full info.)
I also discuss how using too much leverage caused me to do a lot of panic selling in the beginning of my trading experience, and i lost a lot of money. Might be helpful ...
Just came across this video after trying to get information on this for ages, thanks for the help, no super technical jargon just a very good ground up explanation
Interesting video confirming what I was already doing. As long term investor, using leverage is a simple but effective trap. I was actually looking for the overnight fees eToro charges and that is very good news if you don't play around with leverage and only buy long term.
The only problem is that with the new minimum trade sizes, it's really hard for people with smaller account sizes to actually buy any stock or asset without using leverage - and if they do, then that 1 single trade might be 70% of their total account size, or something like that, which in turn is bad procedure in terms of each trade size not being too great a proportion of your overall capital. How safe your strategy is when you're not using leverage really depends a lot on how much money you actually have, which is unfortunate...
I agree, sadly eToro isn't good for anyone which can't put a minimum of $5 000 - $10 000 from the start and split it up into a few trades, or if you use leverage and can temporarily time the market from some news ; very good video overall ;)
Leverage is like them giving you a loan. Overnight fees are the interest you pay on that loan so don't use leverage on buys if you don't have to. The reason you pay overnight fees on sell positions is because they are basically loaning you whatever you are selling until you. Therefore you pay an interest anyhow, leverage or no leverage.
Mawume Buatsi wow nice one
Good info! Thanks
Thanks for this. I learn
a bunch from all your vids.
That's really kind of you to say man, much appreciated :)
So beautifully explained thank you 😍
Thanks so much :)
Straight to the point and informative 😃
Thank you so much for the videos. Really has given me an understanding. Much appreciated.
Very clever way of explaining, nice videos!
Thank you! :)
Love the vids thanks
as a new trader is it not viable to run the stock with leverage without a stop loss and just let it run till you make that £100 or £150 profit on a stop profit limit. What are the risks there
Thanks for your videos and useful information.
Can you explain how leverage and fees work when copy trading? Not sure if this has been discussed in another video.
Hi there - basically if the person you're copying uses leverage, then your copied trade will aslo have exactly th same amount of leverage, and you'll get charged overnight and weekend fees on those trades too. I made a playlist about leverage - hopefully it's got some answers in there. Basically a copied trade acts just like a normal trade, so all the same fees apply. ruclips.net/video/z9M1eB-DTMI/видео.html
basically Etoro call it fees, But it is an interest usually set by the central bank. but it is only apply if you use leverage which is a credit. That is why you have to pay fees or get fess trading currencies even without leverage, because they are in pairs. So right now EUR interest rate is 0% USD interest is 2.75% So when you selling EURUSD pair, you are basically borrowing euro from the "European central bank" and buying usd with it. at the rate you bought. So the if you hold it for a year you make 2.75% return on fees or interest on the amount you sold eurusd. That is why it is not a gable professional traders buy high yield currencies. Over time its value go up.
Stock the same you looking at the companies returns and calculate with the price is at. Is it over valued? or not. I need 5 years 10 year or 20 years to get my money back what I payed for the stock. But it doesn't mean you have to hold it that long. Because if the companies profits go up it means that if you have to wait 10 year to get your money back, it maybe go down to 5 years. so you buy.
And maybe you close your position down in 6 month with a 20% gain. So it is just depends on your trading style. But it is more to it.
Thanks for your insight !
Quite good video, awesome!
Thanks !
Where the overnight (or weekend) fee will be charged? On each trade or
on available balance? How can we have a look for histories of these?
When you buying stock and shares for long what will happen if etoro bankruptcy? Are you still have this stock and shares ?? What do you think?
Do you only copytrading? What if someone who you are copying dies? Wouldn't you buy some strong long term stocks to make sure you have something you can control?
Thanks for clearing that up for me. I’ve played a few RUclips videos trying to understand stand these fees, but your explanation was way more easier to get through my dense brain pan.
i needed to know about the overnight fees as says in the title
Hi, Please forgive me as I am new. I do not understand the difference between trading for 500, as apposed to trading for 100 with a 5 x leverage. Surely it would be cheaper to do the former rather than the latter because there are no overnight fees?
Great! Keep it up!
Thanks man :)
Lol thanks for this video. It turns out I accidentally made myself a noob here. This was because Etoro got rid of the non leverage option and I didn’t notice when I open the same trade second time. Why do they do that for? Because of the weekends i was charged $54.22
Really unhappy.
Hello, I have lost on the shares around $300. I have learnt from your videos really good. I need to know how to do the long term investment like some shares in Google or Apple, It could be in somewhere in Leverage, I put my leverage as i learnt from you is 1:1 which is ok.
So bad
Using AAPL as an example, correct me if i'm wrong please. So you've purchased 1000 untis for $1 each. Say you leave your position open for a month, that's 12 (Fri+Sat+Sun) + 18 remaining days. ( 12x( 3x0,021) + 18x(1x0,021) ) x 1000 = $1134 Is that right?
That would seem an awful lot in overnight fees... It's throwing me off as an example as there's no way you could buy 1000 units of Apple for that much, so my experience is clashing with the maths here :) But yes, the maths look right. For some assets you're charged the weekend fees on Wednesdays, and for others on Fridays (wednesday + Saturday + Sunday OR Friday+Saturday+Sunday) as far as I'm aware.
Of course, that's only if you're using leverage. If you don't use leverage, there won't be any overnight or weekend fees.
Here's what eToro's help page says:
_________________________________________________________________________________
How are the overnight fees on stocks calculated?
For non-leveraged BUY stock positions, there are no rollover fees.
For leveraged BUY stock positions and SELL stock positions, the daily fee is calculated based on the size of the trade (in units), as follows:
BUY Position: Annual interest of 6.4% + 1-Month LIBOR, divided by 365 and multiplied by the opening BUY price
SELL Position: Annual interest of 2.9% + 1-Month LIBOR, divided by 365 and multiplied by the opening SELL price
Let's take a BUY investment of 10 units in AAPL as an example. At the time of writing, the 1-month LIBOR is at 1.55%, and the BUY price of AAPL is $174.00.
(6.4% + 1.55%) / 365 * $174.00 = $0.03790 per unit
x 10 units = $0.38 daily for this trade
Now let's see an example of a SELL investment of 10 units in AAPL. At the time of writing, the 1 month LIBOR is at 1.55%, and the SELL price of AAPL is $173.67.
(2.9% + 1.55%) / 365 * $173.67 = $0.02117 per unit
x 10 units = $0.21 daily for this trade
The overnight fee and the size of the trade in units are listed on the Open Trade window before you confirm you wish to open the trade.
Where will the fees be taken out from once you close the position?
What if the initial investment to buy/sell is not enough to pay for the fees after closing the trade? will it be taken out from the money in my etoro account?
Very good and informative video. Love your channel! Although my story was quite different. I started trading with leverage last week and I doubled my portfolio. Needless to say I used to hold various stock since November and I wasn't that impressed with the results. Same for copy trading.
So the way I do it, I analyze specific stock, then decide if I think it will go down or up from it's position, put 80 x5 on it, and set TP on 10$ as well as SL on -40.
This way, there is some profit at the end of the day, and there is some positions in minus. I check them out, decide if I should open more positions of said stock believing it will bounce back, or I sick up the losses. I'm sure it's not for everyone, and it does require a lot of discipline, but for me it works quite well.
Thanks :) Hope it continues to go well Scott! Although it sounds like you're risking more than you're attempting to make in profit. Is there any way to change those risk vs reward numbers round, or you think that'll mess it all up?
@@SocialTrading you are absolutely right! I often risk several hundreds for 10$ of profit, but this is where I think leverage helps me. If I would open let's say 10 positions 500$ each a day, I would probably felt more in risk than doing the exact thing with 100 and x5 leverage. You are right about the risk being high but as I said before, so far, it works very well for me and for the last seven days I do day trading(or my variation of it) my portfolio is up whopping 76% which is truly amazing. Yes, thanks to Tesla and I also got into NIO before it rocketed(no leverage on nio, even if I could I'm gonna hold this one).
I feel like the risk with leveraged trading really is in stop loss. That is how I lost money on Bitcoin and also on some Tesla positions. I hit SL while sleeping and then it bounced back.
Biggest mistake for me ever was setting up trailing stop loss. Don't ever do that with leverage trades as it will close way sooner and faster than without it. Other than that, my risk management is mainly based on researching the stock and really trying to trade only stock that is on a general trade, doesn't matter if sell or buy, although I heavily lean into buy trades. Also thanks to Etoro which for example restricts some sell trades for failing stocks but I mean, I understand why they do so. Anyway, thanks for replying and keep on the great work with your channel! Wish you luck and health!
Yo great infos so far , but there is something i dont get ! So exampl........ lets say i wanna buy own 100 shares 100dollars a share . to keep the math simple . of a company . and over few months (lets say 3 , 4 or 6 months or maybe even more , maybe 1y or 2 years ,. ) the price of 1 share will rise for 35 % and so i want to sell those 100 shares i bought a year ago . so i bought a share for 100 and next year i can sell it for 135 so will i get charged 365 overnight fees and 52 weekend fees ? like literaly for every day .and what if decide to own a nuber of shares for 5years or 10 years . the fees could get higher than like the 30 % or whatever proffit i made. maybe in some cases i just wanna have a share cus it has a steady value that doesnt shift to much . i am looking at a company that has a sharevalue for more than 8years now between 55 and 63 dollars a share so its fairkly steady and eqach share gives me around 4 dolars dividend per share so im not interested in selling them i wanna hold them and just get dividends . for like 10 years . so will i get charged overnight fees for the time of 10 years ? if i buy a share to hold it for months or years and sell it after a long time . ... .is this still a trade ? . and is this a position ? or what is this ? does the word TRADE have a special meaning like the words BUY and SELL that u described in a nother video of yours. i watched .and sell doesnt mean sell. like it doesnt mean the same like close a position . so has the word trade or a trader a different meaning ?
Very Awesome videos! you have really helped me a lot. Please keep doing it.
Thank you Abdul, that's really kind of you to say - I will - just getting over the Flu, and then I'll make more :)
How can I not use leverage? According to Plus500 my overnight fees have nothing to do with leverage.. I am so confused, would appreciate any help.
Thanks Tom really useful!
Thanks again!
When are the over night fees paid do they come out of your account automatically or do they get paid when the position is closed
Hey there - i found this in their help section:
"Overnight fees are charged every night between Monday and Friday at 17:00 EST for open CFD positions. The weekend fee (x3) is charged on Fridays for most stocks, ETFs and indices CFDs and on Wednesday for most commodities and currencies. Overnight fees for oil and natural gas are charged on Fridays.
Overnight fees for cryptocurrencies are charged daily."
Hi, can you do a new video on the same as the min limits to copy have changed. Would be great help. Many thanks
Hi there. Do you mean a new video on the fact that it's gone from 100 to 200 to copy someone?
You have few but good videos, keep going! Cheers!
Thanks Nicolas :)
What is the percentage next to each stock in the watch list like it'll be 20.4(-1.2%) is that the daily change or weekly change or monthly change? What does it represent exactly
Hi there - at the top of the column, you should be able to see the timeframe that it's referring to. You can change it from 1 day, to 1 week, or 1 month by clicking the little up-and-down arrows right next to the word "Change".
Thanks a lot man. What you're doing is inspiring me to be a better person as well as investor.
That's kind of you to say! :)
oh thank you!
:)
Thanx for the video, but let me correct what you said at the beginning, is that all the exchanges charge for overnight fees, that is NOT true my friend at least for all the USA exchanges, they only charge you when you buy or sell a stock....:)
Interssting - it's pretty standard throughout U.K major exchanges - all brokers have to deal with them. Maybe it's very different in the States. Unless you're talking about option / futures trading? Or you mean actual stocks?
Social Trading Vlog Yes actual stocks and I am a swing trader and I hold for weeks and never got charged :)
Maybe you weren't using leverage? On Etoro, you don't get charged the overnight and weekend fees for many equities 'buy' positions if you don't use leverage...
What happens if your open position goes in the negative? But you leave it open? Sorry if this is a stupid question I am very new to this
if you lose 100% of what you invested, the position should automatically close. It can stay 'in the red' as long as you like, provided it doesn't go down 100%. From August 1st this year (2018) it's apparently going to change, so that if you lose 50% of the value of the trade it automatically closes... (at least that's what i understood from the email)
Social Trading Vlog thanks for your response
Hi I’ve started trading this weekend. Is x2 ok for now?
Do you mean profit, or leverage you've used? I don't know really - all I know is that so many of us get into trouble trying to use leverage with our trades in the beginning.
I was doing quite well I was making some kind of profit on all my trades and got a little over hooked on my theory that you can make a profit on almost anything of you hang on long enough...suddenly that's bit me in the arse and all my trades are falling and I don't want to close anything till it starts rising again...is there anything in my theory or am I just very naive?
To be honest i've been doing the same thing since january with PIs and it didn't work for me either. I remember last year i got stuck in one particular trade with a company called RiteAid, and lost so much on it. It was horrible - tied up my money for moths and lost most of it. Having said that - apparently it's highly unlikely that any active individual trader will outperform certain indices, and i find that an interesting concept. I haven't worked out how to trade based on that though, and I'm still copying people - although one of the guys i'm copying seems to be mainly day trading indices... But that's not the point. Apparently indices over time are a good strategy. But then what if the market crashes!!!!?? Its' tough.
thank you for sharing this
Thank you :)
That 90/ 90/ 90 thing is TERRIFYING!!! How can I become one of those 10/10/10?
I was listening to a guy try to explain that - he's called Anton Kriel - it's a long talk, but I found it very interesting. Basically, don't try to do ten minute trades, or 1 hour trades, or 2 hour trades with lots of leverage - it's the fastest way to lose money. He said there are 2 types of people - those whose goal is to get rich quick, and those whose goal is to get rich slowly. Most of the get rich quick people lose all of their money trading. Most of the get rich slowly people achieve their goal, but it takes discipline not to take huge risks. So he said typically the winners won't make any 1 trade with more than 5%-10% of their account money. And they won't put all of their money into 1 specific type of asset (it's risky). He said successful traders use 80% fundamental analysis and 20% technical analysis. (both have to be learnt if you really want to be a good trader). The obvious answer is, I think, to find out how to identify people on the site who know these things - look for lower risk scores, diversified portfolios, 5-10% position sizes with each asset and copy them :) It's quite a difficult thing to do - I am trying to look for people who have consistent gains over 2 or 3 years, rather than someone who just got lucky and made 200% in one month - i need something which is repeatable, not luck.
I guess im confused i thought the fee was per day not per unit
Great advice
Thanks! :)
Great videos!
Cheers James!
What about copy trading ?
We gonna need a panic button!!! Hahaha
My panic button was the 'Close Trade' button for a while - which is really not a good idea :)
If i dont have any cash available where do they take it from?
Have you found an answer for this question?
lspai no i still dont know...
I may partially close my position just in case then. Leave 50 bucks for the night to find out. (50 bucks is the minimum amount to partially close the position)
Phew, just closed the operantion. It jumped a little bit and I got on the green.
hey man thanks for your videos very informative to a noob like me haha, i do have a question more about etoros service than anything have you withdrawn money since using it and how did that go? appreciate you getting back when you can cheers
Hi there, thanks for the comment :) Yeah, so the first thing i was worried about was wether it was all just a scam and they'd just steal my money somehow - so i initially put in $1000 and i traded a bit for a couple of months, and then withdrew the whole amount just to see how hard they would make it or whether they'd just keep it or something. There was a fee of about $25 or something to process the withdrawal (there's a page on their site which shows all the charges) but the money came into my account in a few days. I did get a call from their customer service asking if everything was O.K which i didn't really like but i know that's just them trying to retain customers - part of the sales system. I then put $2,500 back in as i felt more confident with them, traded with that for a while and then withdrew $1,700 to buy the camera equipment to make videos - they called me again asking if everything was ok (annoying again but only 1 call) and i paid the withdrawal fee and got my money back fast. They always pay into the same account that you used to put the money into their site in the first place. I've talked to a few other guys and they all got their money back - many withdrew a lot lot more than i have, so i think it's all fine. They're so big now that i don't think it's worth them ripping anyone off and losing all their business from bad reviews.
i should make a video about this :)
no problem, cheers for the reply. ok cool sounds hopeful compared to some other posts ive read . yeah man always a good topic if you can seperate a site like this from having a bad scam warning with an honest experience
Have you heard of other people having problems withdrawing from Etoro?
yes alot of bad reviews on a couple of sites but they all evolve around not being verified and things like that, was hard to get a clear picture hence why i asked yourself
Thanks ☺️
cheers for watching! :)
Who told you that daytrading isnt possible anymore ? Thats just outright false. Daytrading is still very well possible, its even less risky than what you describe as medium to long term trading because you are only betting on moves intra day.
It was some pros I was watching who were talking about how it used to be in the 80s before high frequency trading became standard for big banks. Apparently day trading and scalping was much much easier and vastly more profitable. They were saying that the HFT algorithms now siphon out all of those profits they used to make so it's not worth it to them. Great if it's still going well for you though! Nice.
@@SocialTrading Well true scalping is not really profitable anymore. But daytrading as in: closing every position in less than 48 hours is still very profitable and very consistent.
Hi, I hope you can answer my question. I had a available balance of $118. The next day it went down to - 0.75. How is that possible? My equity in gbp is the same before this adjustment. Would you have any idea? I have a couple of stocks on leverage 10x and 5x. Also, why would some x10 leverage have $0 fees? Thanks in advance.
did you invest in a stock (by buying) which "gapped" down significantly overnight? What i mean is did you invest in something, and find that when the markets opened today your stop loss on that trade had been triggered? The only way i can see this happening is that you might have bought a stock or whatever, and set your stop loss to wherever you set it, but overnight, when the markets were closed some news came out which caused the price of whatever you invested in to go the wrong way and you lost money, but the price went very far the wrong way, so far that it went well beyond your stop loss or the original amount you invested in that item, and the trade was automatically closed when the markets opened as you loss was beyond your specified stop loss, but you had lost so much more becauase of the size of the price change that etoro took the additional money you lost our of your available funds to cover the full amount of the loss. Seeing as how this was yesterday, I'd have to bet that it was possibly a trade you opened on Google before their earnings report came out - A Buy trade. Their earnings report wwas received badly by the markets and it came out after the markets closed, so it will have lost a lot of money when the markets opened in the morning. If you used X10 leverage this is easily possible. Is that maybe it? You see a stop loss can only be triggered and protect you money if the markets are actually open at the time the asset changes in price. If the markets are closed when the asset violently changes price, then the stop loss will trigger as soon as the market opens at whatever the market price is when it opens (if that price is equal to or greater loss than your specified stop loss.) Re the X10 leverage with no fees - it depends on the asset you're trading in some cases, have you checked the fees page?
Social Trading Vlog hi, thanks for such a quick response. It was actually quite funny how you slowly got to the point that it was Google. You are indeed correct, I had Google on x10 leverage over a few days now, and after the earnings I have noticed it had drop dramatically which I expected before the market opened. But my stop loss was set quite low therefore my Google is still active. I haven't loss too much on Google(minus $60 to be precise) and it is not near my stop loss at all. It is just quite strange my available balance went from 118 to - 0.75. My equity has had no change, it is still the same amount as the day before.
Hmmmmm. Unless something somewhere's triggered a gapped stop loss I just don't know. Or maybe you set a stop loss further than your position margin allowed? So for every position you open you can set a stop loss up to 95% (i think it's 95% but you'll need to check that) They do this so that any money you can potentially lose is included in the original amount you place on the trade - so if your trade is $100 you can set a stop loss up to $95. However... While that trade is open, you can actually set the stop loss top be at greater than 100% amount of the trade size. So, you could set your stop loss at -$150. But in order to do this, you have to have the funds in your available funds to cover the total amount you could potentially lose, and the system will warn you that "an additional $50 will be taken from your available funds" before you click the "update" button and increase the stop loss beyond 100%. Did you do that?
it could be 1 large increase in 1 stop loss on a single trade, or smaller increases past 100% in a few different trades...
Hmmm..you could be right but I just think it is strange my available balance deducts and my equity is the same. Or maybe it is just me? Maybe I overlooked the 118 and didn't realise it went into minus. I now doubt myself. Anyhow, I think I got the hang of all this leverage but it is still a learning process. Thanks for the help, and your videos are also great help. Very informative.
I'm new to trading and I was wondering if you could tell me why when I stop copying sometime says "Total Fees" and some others "Total Refunds". Thank you
Hi Leo - you can go to the fees page via the help section, and you'll see that instead of incurring overnight and weekend fees, some assets actually give you a credit when you hold them overnight :) Nice ...
No wonder where Etoro gets all their ad money from
Thanks Simon Cowell
No worries :)
@@SocialTrading Bro, I am new to this and dont understand how to avoid overnight fees(with leverage) for commodties. should I sell each day before midnight ? is that the concept ? thanks ( i know its not an economic advice but more of technical advice ) .... keep it up
mabohnad
Is this still true?
I'll have a look and check, although the recent video i made (yesterday) about leverage and fees does cover the current situation with overnight fees as they are now, so that might be worth checking out.
So that's where Kevin Petersen is hiding?
:)
I lost 73% of my equity within like 2 months, ive learned my lesson now
Ouch... I lost 38% in my second month.
@@SocialTrading you lucky guy xD
Very informative..Thank you.
Thanks Kyle, much appreciated!