# Options, ASX CFDs, futures, minis... which one?



## RazzaDazzla (8 August 2008)

Am looking to get into some trading. I have previously traded ETOs quite unsucesfully and with a bit of a scare.

I was mainly writing credit spreads (Selling say a $10.00 call and buying a $10.50 call as protection) and vice versa with puts. Whilst not winning many and having no money management stratergy what so ever, the following happened;
I was in a RIO position some 5+ years ago and they announced a share buy back. As I had sold a call, I was liable for basically the balance of the value of this buyback. I still remember when my broker called me up telling me I was up for about a $50K loss! As a uni student at the time, i laughed, then cried, then rolled into the fetal position.

A letter latter to the broking firm (blah blah, I pay for full service brokerage, and I was never warned about this buy back) they covered my buy back obligations.

Anyway, I am looking to get back into some trading with about $10-$20k in my war chest.

So what product/market should I choose?
*Options *- I had been frustrated previsouly with lack of liquidity and the feeling of being taken advantage of by Market makers. Whilst i realise their benefits with selling calls over stocks, buying puts for protection etc, are they worth trading?

*ASX CFDs* - I beleive these to be more 'transparent' then other CFDs offerd by other providers. I've read a few threds about stops being hit out of the blue, and other 'funny' goings on. So I beleive if I chose CFDs, these would be the way to go.

*Futures* - I have only just began my readings on futures, but beleive that this really is a day trading, whatch the screens second by second kind of sport.

*Mini CFDs* - I was all excited when I first read about ABN AMro minis, however I beleive that the spread between bid and ask can be a bit 'funny' at times. Also, as it is a 'warrant' product, I beelive it truly is only intended to benefit the issuer (ABN AMro).

I am looking into getting a margin loan facility (I have another thread enquriing about this) but this would be more of a long term adventure.

If anyone has had experience with some or all of these afore mentioned trading instruments, I'd love to know your words of wisdom, hear your stories, etc.

Cheers
Ryan


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## DennisTheTrader (9 August 2008)

RazzaDazzla said:


> .....I still remember when my broker called me up telling me I was up for about a $50K loss! As a uni student at the time, i laughed, then cried, then rolled into the fetal position.
> A letter latter to the broking firm (blah blah, I pay for full service brokerage, and I was never warned about this buy back) they covered my buy back obligations...




haha! Lucky you were covered!

I can only comment on CFD’s and Options since I don’t have experience in the others you mentioned.

I prefer CFD's. With options, I dont like that fact that even if the stock price hits your target, the option price would still depend on the market makers who are also trying to make money on the spreads. ...this was an extra variable I could do without. Whereas CFD's uses the stock price and thats it.

Unless your trading style takes advantage of the time decay of the option contracts, then I personally prefer CFDs for simple directional trades (buy when i'm bullish, sell when i'm bearish). 

Just be aware of the unlimited loss potentional of CFD's (like writing options contracts as you did). However this can be controlled using Guaranteed Stops.


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## RazzaDazzla (9 August 2008)

DennisTheTrader said:


> haha! Lucky you were covered!
> 
> I can only comment on CFD’s and Options since I don’t have experience in the others you mentioned.
> 
> ...




Dennis,

Yeah, I was equally frustrated with that lack of liquidity in options. Though I agree, they are probably best used for writing and utiliisng time decay.

Do you trade ASX CFDs? Do they have guaranteed stops?

Can you point me to some reading on how these guaranteed stops actually do work?

Also, do Interactive Brokers allow trading of ASX CFDs?

Cheers
Ryan


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## The_Snowman (9 August 2008)

I suggest you go to the first, the biggest and the best CFD broker on the net and open a demo account at 
IG Markets
They have all the answers to your questions, all your educational needs..... check it out..........


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## RazzaDazzla (9 August 2008)

they trade ASX CFDs?

I like the idea of IB as it appears as a 'one stop shop' for all my equity needs.


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## The_Snowman (9 August 2008)

RazzaDazzla said:


> they trade ASX CFDs?
> 
> I like the idea of IB as it appears as a 'one stop shop' for all my equity needs.




Your call, end of thread..........


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## RazzaDazzla (9 August 2008)

so do they trad ASX CFDs?

end of thread...

(pfft what was that?)


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## DennisTheTrader (9 August 2008)

RazzaDazzla said:


> Dennis,
> Do you trade ASX CFDs? Do they have guaranteed stops?
> 
> Can you point me to some reading on how these guaranteed stops actually do work?
> ...




Hi Ryan

Guaranteed Stops is when you pay a small fee which allows you to exit the trade at a set price. Eg. You go long at $20 and set the guaranteed stop at $19. So even if the stock drops to $3, it automatically sells it off at $19

To be honest I dont know the difference between CFD's and ASX CFD's. But I agree with snowman, just signup to IG Market's demo account, read their turorials about guaranteed stops, etc and more importantly place some trades. 

You'll be suprised how easy it is just by playing around in the demo.


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## mazzatelli1000 (11 August 2008)

DennisTheTrader said:


> haha! Lucky you were covered!
> 
> With options, I dont like that fact that even if the stock price hits your target, the option price would still depend on the market makers who are also trying to make money on the spreads. ...this was an extra variable I could do without.
> 
> Unless your trading style takes advantage of the time decay of the option contracts....




Totally concur with lack of liquidity in Oz market.

Even when taking advantage of time decay, in trying to close out, there is not enough liquidity. I have been left to watch the short option value go up.

So i only trade US options, but even there, there can be liquidity issues for certain stock/ETF's.

Been having a look at options surrounding the Kospi though.......


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## RazzaDazzla (12 August 2008)

I signed up for my Demo IG markets account.

Looks ok.

Stupid question, but how do I trade CFDs in the demo account? I can see indicies, commodoties, shares etc on the list on the left, but no CFDs?

Also, can you trade ASX CFDs on IG markets?


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## rossw (13 August 2008)

mazzatelli1000 said:


> Been having a look at options surrounding the Kospi though.......




Most liquid options market in the world...


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## The_Snowman (13 August 2008)

RazzaDazzla said:


> I signed up for my Demo IG markets account.
> 
> Looks ok.
> 
> ...




I don't understand the question; do you mean CFD's on the stock ASX or the CFD's that trade on the ASX? I think the ASX has their own brand of CFD's, which they claim are better (?) but you can trade 1,000's of CFD's with IG, not to mention currency, indices, oil, gold - you name it. Also, you can trade the AUS 200 CASH 200 Index for 0.25 per point, while you are learning, with no transaction fees on index trading!! Have a look at today.........


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## The_Snowman (13 August 2008)

RazzaDazzla said:


> I signed up for my Demo IG markets account.
> 
> Looks ok.
> 
> ...




O, I forgot, the *"shares" *you see on the left, they are not shares, they are the CFD's on the shares, guess there is no better way to do it!


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## lasty (13 August 2008)

CFD's arent allowed in the US so IB cant do them.
www.Kineticsecurities.com.au  do CFD's, Stocks, Options, Futures. 

One stop shop so check them out !


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## acedrum (13 August 2008)

RazzaDazzla said:


> I signed up for my Demo IG markets account.
> 
> Looks ok.
> 
> ...




If you trade ANYTHING at all in the list on the left you are trading a CFD (contract for difference).


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## mazzatelli1000 (13 August 2008)

rossw said:


> Most liquid options market in the world...




Hey Ross, 

Its something I have heard/seen alot...but havent met anyone yet whose had first hand experience trading them.

Have you at all?? Just wondering --- would be great to hear some war stories!!


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## The_Snowman (14 August 2008)

lasty said:


> CFD's arent allowed in the US so IB cant do them.
> www.Kineticsecurities.com.au  do CFD's, Stocks, Options, Futures.
> 
> One stop shop so check them out !




I did, and it looks like you need several dealing platforms and the data cost is high, much prefer IG Markets


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## The_Snowman (14 August 2008)

RazzaDazzla said:


> they trade ASX CFDs?
> 
> *I like the idea of IB as it appears as a 'one stop shop' *for all my equity needs.






lasty said:


> *CFD's arent allowed in the US so IB cant do them.*
> www.Kineticsecurities.com.au  do CFD's, Stocks, Options, Futures.
> 
> One stop shop so check them out !




So much for that idea, Razza......... are you still here????


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## lasty (14 August 2008)

Hi Snowman,

Kinetic securities white label IG markets platform. Its called CFD Centurion.
So no difference there with CFD's.
Kinetic white label IB's platform called Global Trader.
They also provide ASX Stocks and Options.
In other words one stop shop.


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## professor_frink (14 August 2008)

The_Snowman said:


> So much for that idea, Razza......... are you still here????




They do offer shares on margin, so do pretty well the same job as CFD's(unless of course you need an insane amount of leverage that comes with a CFD, which nobody does).

And they actually offer access to a real market where you won't be trading against your broker. The FX side of IB is also an ECN, far superior to the MM model offered by CFD providers.

Suprised that you can even try and compare the 2


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## professor_frink (14 August 2008)

lasty said:


> Hi Snowman,
> 
> Kinetic securities white label IG markets platform. Its called CFD Centurion.
> So no difference there with CFD's.
> ...




Hi lasty, what do you mean by white label?


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## Sean K (14 August 2008)

The_Snowman said:


> I did, and it looks like you need several dealing platforms and the data cost is high, much prefer IG Markets



The Snowman, 

You are very keen to promote IG Markets.

Interesting...

You must find them a very good business partner.

Otherwise, why be so determined to support them on a public forum?

Interesting.......





(Disclosure: with IG)


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## The_Snowman (14 August 2008)

lasty said:


> Hi Snowman,
> 
> Kinetic securities white label IG markets platform. Its called CFD Centurion.
> So no difference there with CFD's.
> ...




The Stockies start today

Cast your vote now for the best broker and stock forum in Australia. The Stockies – the CompareShares Awards for the best in the industry based on one gigantic investor poll - officially start today.

The Stockies help traders and investors source the best in the industry. So get behind your favourite broker and stock forum now and cast your vote. Remember, our voting system only allows you to vote once.

Voting categories:
- Contracts for Difference
- Share Trading
- Forex
- Warrants
- Futures
- Options
- Margin Lending
- Stock Forum

CFD VOTE HERE


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## glenn_r (14 August 2008)

Looks like a cooked poll as I see Interactive Brokers amongst others are not included and who is crazy jim smith, his forum @ $200 per year looks like a money spinner.


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## theasxgorilla (14 August 2008)

glenn_r said:


> Looks like a cooked poll as I see Interactive Brokers amongst others are not included and who is crazy jim smith, his forum @ $200 per year looks like a money spinner.




How can they not have IB in there?

On a positive note, it looks like ASF has taken an early lead in the forum voting:

http://www.thebull.com.au/the_stockies/forums.html


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## glenn_r (14 August 2008)

Lmfao and of course you can vote as many times as you want, I would take the results of this poll with a grain of salt.


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## Boggo (14 August 2008)

glenn_r said:


> Lmfao and of course you can vote as many times as you want, I would take the results of this poll with a grain of salt.




I agree entirely glenn, Marketech also missing off the list 

Mike


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## Boggo (14 August 2008)

kennas said:


> The Snowman,
> 
> You are very keen to promote IG Markets.
> 
> ...




Only thread he has not been on is this one 
https://www.aussiestockforums.com/forums/showthread.php?t=7952


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## The_Snowman (14 August 2008)

glenn_r said:


> Lmfao and of course you can vote as many times as you want, I would take the results of this poll with a grain of salt.



Really???  Have you actually tried to multiple vote before shooting your mouth off???


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## glenn_r (14 August 2008)

The_Snowman said:


> Really???  Have you actually tried to multiple vote before shooting your mouth off???




Yes, I just gave ASF 3 more votes.


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## Trembling Hand (14 August 2008)

Boggo said:


> Only thread he has not been on is this one
> https://www.aussiestockforums.com/forums/showthread.php?t=7952




LOL.

That poll is a joke. IB blows all the bucket shops away.

By the way IG is only the biggest when you ask them. Have seen other reports quoting CMC as the biggest. Which isn't in the poll.......


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## theasxgorilla (15 August 2008)

Trembling Hand said:


> LOL.
> 
> That poll is a joke. IB blows all the bucket shops away.
> 
> By the way IG is only the biggest when you ask them. Have seen other reports quoting CMC as the biggest. Which isn't in the poll.......




Yeah exactly, WTF is CMC????  I also thought they were the biggest.


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## lasty (15 August 2008)

Professor Frink,

Whitelabel is a term used by products providers allowing other companies to use their system with their own brand logo etc.

In some instances they can have exclusive rights in certain time zones.


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## The_Snowman (15 August 2008)

Boggo said:


> Only thread he has not been on is this one
> https://www.aussiestockforums.com/forums/showthread.php?t=7952




Thanks for the heads up on that one, no new posts there for a long time now, but interesting reading for sure........


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## The_Snowman (15 August 2008)

kennas said:


> The Snowman,
> 
> You are very keen to promote IG Markets.
> 
> ...




Just a satisfied customer  if you must know. Are you the self appointed forum policeman? 

forum (plural forums or fora)

   1. A place for discussion.
   2. A gathering for the purpose of discussion.
   3. A form of discussion involving a panel of presenters and often participation by members of the audience.
   4. An Internet message board where users can post messages regarding one or more topics of discussion.


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## professor_frink (15 August 2008)

The_Snowman said:


> Just a satisfied customer  if you must know. Are you the self appointed forum policeman?
> 
> forum (plural forums or fora)
> 
> ...




He is actually

mod·er·a·tor  (md-rtr)
n.
1. One that moderates, as:
a. One that arbitrates or mediates.
b. One who presides over a meeting, forum, or debate.


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## professor_frink (15 August 2008)

lasty said:


> Professor Frink,
> 
> Whitelabel is a term used by products providers allowing other companies to use their system with their own brand logo etc.
> 
> In some instances they can have exclusive rights in certain time zones.




ok gotcha


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## white_goodman (15 August 2008)

professor_frink said:


> He is actually
> 
> mod·er·a·tor  (md-rtr)
> n.
> ...




ziiiing, i havent seen a serving like that in a long time


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## The_Snowman (15 August 2008)

white_goodman said:


> ziiiing, i havent seen a serving like that in a long time



Oh, boo hoo, now you hurt my feelings ...... so you can have a whole thread to bash IG, but when just little old me says, they are OK, it is such a big deal? In other words, all I did was express and share my opinion, which is what a forum is for, just because that doesn't agree with your opinion is just cause to rubbish it? 

Moderate that


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## skyQuake (15 August 2008)

Hey snowman, how do you find IG when the markets moving very fast? ie Lots of upticks and downticks during open for example. IG doesnt really have a buy at market option so a its incredibly hard to open or close a position during those times. I get a lot of 'this price is no longer available' crap when i try scalping which is quite frustrating.

On a side note, can I negative vote warrants? Everything else has some special advantage, but warrants are just so insanely overpriced that they should not be touched...


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## KirkM (15 August 2008)

The_Snowman said:


> ...... so you can have a whole thread to bash IG, but when just little old me says, they are OK, it is such a big deal? In other words, all I did was express and share my opinion, which is what a forum is for, just because that doesn't agree with your opinion is just cause to rubbish it?
> 
> Moderate that




haha. good one snowman. 

Now is it just me or does anyone else feel like this forum (in general) is like a "schoolyard of kids" just waiting for their chance to put down, or criticise someone else? I'm not talking about this post in particular.

I get that from reading the responses in other posts. I hope its just me.


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## white_goodman (15 August 2008)

The_Snowman said:


> Oh, boo hoo, now you hurt my feelings ...... so you can have a whole thread to bash IG, but when just little old me says, they are OK, it is such a big deal? In other words, all I did was express and share my opinion, which is what a forum is for, just because that doesn't agree with your opinion is just cause to rubbish it?
> 
> Moderate that




never bashed them at all, i was just admiring that delicious serving of irony


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## professor_frink (15 August 2008)

KirkM said:


> haha. good one snowman.
> 
> Now is it just me or does anyone else feel like this forum (in general) is like a "schoolyard of kids" just waiting for their chance to put down, or criticise someone else? I'm not talking about this post in particular.
> 
> I get that from reading the responses in other posts. I hope its just me.




So that's why you signed up a second account then hey? Needed a fresh start after copping some grief earlier?

Don't worry we aren't always on the attack here though. Only a few times a week


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## KirkM (15 August 2008)

professor_frink said:


> So that's why you signed up a second account then hey? Needed a fresh start after copping some grief earlier?
> 
> Don't worry we aren't always on the attack here though. Only a few times a week




Thank you


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