# New 1 point spread on CFDs?



## Bobby (4 April 2010)

Having done thousands of trades with ~ IG's  Aussie 200 & their 2 point commission on entry & exit ' now IG now offer 1 point  !

Guess its caused by competition or is it ,  correct me if wrong thanks ? 

Cheers Bobby..


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## amb005 (4 April 2010)

Yeah its awesome, should help out a lot of traders, its a great work from IG and hopefully its a sign of whats to come with other indices and markets.. maybe eventually even being able to see DOM with the ability to enter directly into the books.


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## Alpha_Bet (4 April 2010)

If you have the funds I suggest it's best to trade the Futures contract through the exchange not the MM synthetic.


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## amb005 (5 April 2010)

Alpha, with a 1 point spread, which is just the bid/ask spread, what advantages do actual futures have? You can have the exact same position as the actual future without having to have margin.


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## Trembling Hand (5 April 2010)

amb005 said:


> Alpha, with a 1 point spread, which is just the bid/ask spread, what advantages do actual futures have? You can have the exact same position as the actual future without having to have margin.




WRONG!!

Its clear that very few around here that trade CFD indexes ever make it to trading futures which are higher margin and up to 25 times the tick value, that is they never get off micro lots to trade anything worth while.

Why?

Because your synthetic "free" market is the most expensive & costly to enter and exit and has the least amount of liquidity when you need it.

In short CFD are out and out RUBBISH.


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## Largesse (5 April 2010)

SPI isn't much better at the moment


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## amb005 (5 April 2010)

Tremble, I do trade SPI futures. Genuinely trying to add the pros and cons with trading the actual futures. 

With the actual futures, if you buy and sell straight away you are going to be paying the bid/ask spread + brokerage. With CFD if you buy and sell straight away you are going to be paying the bid/ask spread only.

With actual futures you can only sell/buy what is available at a certain price, with CFD you can sell a 10 lot even if only a 6 lot is in the bid.

I actually think its good to be able to determine your own value of a point, rather than in multiples of 25, with CFDs you can make it 25 a point if you want, or 10, or 1, or 63. Its a lot more flexible, and I dont see how that can be a bad thing.

The advantages of the actual futures is being able to see DOM (which is not that much of an advantage these days with the bot, for me anyway) it screws me a lot more than helps, the main advantage is being able to put orders in the book. Also with futures you actually have the contract. Besides that I dont see much else they beat CFDs with, they both have their pros and cons, at the very least its giving traders without the margin a fair shot at making it on a CFD account, it would be amazing if they could still make money from SPI with a 2 point spread in these times


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## sinic (5 April 2010)

At least with real futures you can get in the queue and buy at the bid if you want to take the risk of the market not moving away - cant do that with non dma cfds.


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## Kryzz (5 April 2010)

Trembling Hand said:


> WRONG!!
> 
> Its clear that very few around here that trade CFD indexes ever make it to trading futures which are higher margin and up to 25 times the tick value, that is they never get off micro lots to trade anything worth while.
> 
> ...




Do you still subscribe to your post you made in this thread TH, as using CFD indicies as a "stepping stone"

From TH:

Steps to trading futs are as follows,

   1. Backtest
   2. Sim
   3. Trade live on CFD minis if new to trading or small account
   4. Once profitable move to cheaper & real futs
   5. Increase volume
   6. Pick colour of Ferrari


CFDs are a good learning tool but are VERY expensive and you would be mad to trade off the data that they provide. Worrying about MM stop sweeps and dodgy practises will just get you paranoid and bitter before you even get to playing with the big boyz in the futs who are far more dodgy and ruthless than any bucketshops. Get over it, it's a game of taking money off someone else.


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## Trembling Hand (5 April 2010)

amb005 said:


> With actual futures you can only sell/buy what is available at a certain price, with CFD you can sell a 10 lot even if only a 6 lot is in the bid.




lol. until you actually start making money then all of a sudden you cannot get a fill on any volume.

of course if you're a loser you can get any size trade you want. Go figure!!


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## amb005 (5 April 2010)

@ sinic yeah mate, thats what I mean be being able to enter in the book.

@ tremble, haha Ive heard this, I got a mate who made 50k with no probs at all then all of a sudden every order put through was "thought" about for 30 secs before being accepted or declined, with orders that moved against him being accepted more often than orders making him money. Unfortunately I cant test this for myself as the CFD account is in negative territory.


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## Trembling Hand (5 April 2010)

Kryzz said:


> Do you still subscribe to your post you made in this thread TH, as using CFD indicies as a "stepping stone"




The diff is most start at CFDs because they have no money and no skill and hope to build up their account and skill live. Rather than starting with a decent amount of money and just using it for a quick confirmation/confidence builder of a system/approach.

But it seems to never happen. Seems most approach CFD indexes as a way to go from $2000 to $200,000. Only seen it happen 1 time, other than myself, and that poor sucker blew up shortly after because they actually had no execution & trade management skills after all. Which is right back to my above point.

Sure use them to get a feel - but they suck!!


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## nulla nulla (5 April 2010)

Trembling Hand said:


> lol. until you actually start making money then all of a sudden you cannot get a fill on any volume.
> 
> of course if you're a loser you can get any size trade you want. Go figure!!




Feel free to correct me if I am wrong but I get the impression with cfd's that you are effectively playing against the cfd provider/broker. Limited to the stocks they cover, the options they offer, their rules in respect of stops, brokerages, divs, and any other fees they wish to apply. To stay in business they need to win, if you are winning it would not be in their interests to continue to take your business?


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## Trembling Hand (5 April 2010)

Yeah Nulla that seems to be the way. Especially if you are trading short term as they don't get to add the extra interest costs and hedging your positions every little trade becomes prohibitively expensive to them. 

They hate scalpers.


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## Alpha_Bet (5 April 2010)

Trembling Hand said:


> lol. until you actually start making money then all of a sudden you cannot get a fill on any volume.
> 
> of course if you're a loser you can get any size trade you want. Go figure!!



 The MM I used said the problem was always my end. Computer freezes etc. Strange my futures brokerage platform was rock solid all the time!


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## skyQuake (5 April 2010)

MM's will not let u do _real_ size. 5or 10lot MAX. And if you make money your account will be slowed down to 30sec for an order to process etc.

Time is a major factor too, your orders will take 5~10 sec to process? And if the market runs you hit the buy it'll usually come up with 'price is no longer available'.

Futs you can also sit on levels and get hit, by ppl paying the spread for you or spikes... With MM's spikes in your favour (to open limit orders) are usually ignored and spikes against u are stopped out at the tip.

Good luck with all that and slippage... Otherwise, 1pt is a decent improvement, makes it a 'less bad' platform trading a pretty bad insturment


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