7.3 +0.05 (+0.69%) Sell

Joy for GCAP investors as it performed better than the broader market

13 min read

GAIN CAPITAL HOLDINGS, INC. outperformed on Friday. It surged by +0.69% to close at 7.3. On a day when the overall market breadth was 35%, it closed higher than 18% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing GCAP]

GCAP is currently in a bearish trend. The previous short signal in GCAP has not been profitable for investors in general. If you are short on GCAP at current levels please make sure that your allocation is limited and that your portfolio is well diversified.


GCAP has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 11 Jan, 2016 to 2 Oct, 2018. Over the last 2 years 11 months and 3 days, GCAP underperformed the SP500 index on 50% days. Which indicates that on days GCAP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

GCAP returned losses on 56% days in the last three months. During this time, it delivered on average -0.01% per day. It delivered it's best daily return of +9.26%, during this period, on Tuesday, 9 Oct, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +21.29%) started on 3 Oct, 2018 and went on till 9 Oct, 2018 while the bearish trend (which returned -5.32%) started on 17 Sep, 2018 and went on till 21 Sep, 2018.

During the last year GCAP had 4 profitable months and 8 loss making months. GCAP returned profits in fewer months than SP500 index. GCAP was also a more risky investment than SP500 index as it's worst month in the last year, Jan 2018, returned -22.59% compared to -7.28% returned by SP500 index in Oct 2018. GCAP had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -30.27%. It is interesting to note that both GCAP and SP500 index significantly outperform during months when quarterly/annual results are announced.

The stock market is filled with individuals who know the price of everything, but the value of nothing.
-- Phillip Fisher

GCAP is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant fall in GCAP's volatility from 9 Oct, 2018 to 15 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that GCAP has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

SP500 index has more chance of extreme outcomes than GCAP. Therefore, SP500 must receive a lower allocation than GCAP in your portfolio. SP500 index usually has shorter drawdown period than GCAP.

Based on your interest in GCAP you may find it interesting to know that MGI, AXTI and PDEX have all performed similar to GCAP and qualify as alternative investment candidates that must be evaluated for diversification.

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