# Preferred CFD Providers



## YOUNG_TRADER (23 April 2006)

Hi there, 
Have been looking @ CFD's for awhile now am considering giving them a go.

I have beend looking at the main 4 providers,

IG, CMC, Macquarie and Man Finanacial

As far as resource stocks go, Macquarie requires a margin of between 10% - 45% (45% almost defeats the purpose of leverage), but are obviously secure because they are backed by Macquarie and offer DMA with some GSL and shorting,

CMC seem to be the most flexible ie very little margins required, huge leverage allowed (ie lose more ) Stop losses?
They creat their own market spread? so not DMA, I gather that this is bad as they will always construct the spread so that they win long term.

I really like the look of IG markets, Very low margins on resource stocks I like, much better thnn Macquarie and they allow GSL (with slight premiums)
How have people found IG Markets, especailly their L2 DMA System?



Don't know much about  Man Financial


I would be interested to know how others are finding their CFD providers, how realiable is the software, how realiabe is the provider, how quickly do they transfer funds etc etc


Thanks in advance


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## Porper (23 April 2006)

*Re: Prefered CFD Providers*



			
				YOUNG_TRADER said:
			
		

> Hi there,
> Have been looking @ CFD's for awhile now am considering giving them a go.
> 
> I have beend looking at the main 4 providers,
> ...




I use IG markets and find them to be good.I use the L2 system now (just the last week) and when I place a trade, within seconds they match your order in the depth, which is a plus as it helps the price in your direction, maybe only a slight help but we need all the small advantages we can when using CFD'S.

I haven't tried to get any of my money out yet, I have heard some horror stories about IG, whether true or not I don't know, time will tell.


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## cashman (23 April 2006)

*Re: Prefered CFD Providers*

"I haven't tried to get any of my money out yet, I have heard some horror stories about IG, whether true or not I don't know, time will tell." 


Please tell us more ?


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## nizar (23 April 2006)

*Re: Prefered CFD Providers*

I heard macquarie offers guaranteed stops, i dont know maybe the others also offer this..

And i agree YT 45% leverage is a joke...

But with all those 4 CFD providers u can only get leverage on top300 companies?


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## YOUNG_TRADER (24 April 2006)

*Re: Prefered CFD Providers*



			
				nizar said:
			
		

> I heard macquarie offers guaranteed stops, i dont know maybe the others also offer this..
> 
> And i agree YT 45% leverage is a joke...
> 
> But with all those 4 CFD providers u can only get leverage on top300 companies?





IG Offers guaranteed stops (GSL's at a premium) I prefer Macquarie's security but also prefer CMC's tradeability/flexibility/leverage, IG seems to be a good equilibrium, ie GSL's, DMA, Good Leverage, Low Margins etc

I think I'll go with IG


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## phoenixrising (25 April 2006)

*Re: Prefered CFD Providers*

I started with IG early last year, then opened with Man shortly after, when they became available.

Negatives for IG -  non DMA, hard to use platform, at times of hi volatility they won,t allow trades. Eg, someone could't take OXR @ 2.94 open, IG refused last week. (I took it on Man, currently 3.50 or so)

Positives for IG - GSLO - for a premium

Positives for man - ease of use, big reputable co.

Negatives for Man - no GSLO, $10k starting cap (may be $5k now)

If talking to IG, grill them on the volatility issue, both long and short. This is where cfd's are supposed to have a big advantage, to be told no trades is not good.


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## Bobby (26 April 2006)

*Re: Prefered CFD Providers*



			
				phoenixrising said:
			
		

> I started with IG early last year, then opened with Man shortly after, when they became available.
> 
> Negatives for IG -  non DMA, hard to use platform, at times of hi volatility they won,t allow trades. Eg, someone could't take OXR @ 2.94 open, IG refused last week. (I took it on Man, currently 3.50 or so)
> 
> ...



Sorry but whats DMA & GSLO mean ? please.


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## RodC (26 April 2006)

*Re: Prefered CFD Providers*

DMA is Direct Market Access

GSLO is Guaranteed Stop Loss Order.

regards,

Rod.


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## YOUNG_TRADER (26 April 2006)

*Re: Prefered CFD Providers*

IG do offer DMA via their L2 platform


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## chemist (1 May 2006)

*Re: Prefered CFD Providers*



			
				YOUNG_TRADER said:
			
		

> IG do offer DMA via their L2 platform




What does DMA matter? AFAIK it is part of the provider's risk management system, not something that affects the prices you receive. As long as I receive market prices (+/- spread) then I don't care how the provider hedges.


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## mlennox (1 May 2006)

*Re: Prefered CFD Providers*

checkout this website list of all the providers compared on this page....

http://cfdtools.com/au/content/view/53/50/


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## Porper (1 May 2006)

*Re: Prefered CFD Providers*



			
				chemist said:
			
		

> What does DMA matter? AFAIK it is part of the provider's risk management system, not something that affects the prices you receive. As long as I receive market prices (+/- spread) then I don't care how the provider hedges.




I disagree there Chemist.

Having IG match your order in the depth must have an effect on the price of the underlying share.It won't effect the price for you, but will effect the price thereafter as "real" shares have been purchased or sold.


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## sam76 (1 May 2006)

*Re: Prefered CFD Providers*



			
				mlennox said:
			
		

> checkout this website list of all the providers compared on this page....
> 
> http://cfdtools.com/au/content/view/53/50/




Cheers mlennox!


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## ozymick (1 May 2006)

*Re: Prefered CFD Providers*

HI all

I am interested in learning about trading CFD any good sites you can recommended 

thanks

Michael


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## Bobby (1 May 2006)

*Re: Prefered CFD Providers*



			
				Porper said:
			
		

> I disagree there Chemist.
> 
> Having IG match your order in the depth must have an effect on the price of the underlying share.It won't effect the price for you, but will effect the price thereafter as "real" shares have been purchased or sold.




Hello Porper,

Can you elaborate more on your obove comment regarding effect on Real share price please.

Bob.


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## Porper (1 May 2006)

*Re: Prefered CFD Providers*



			
				Bobby said:
			
		

> Hello Porper,
> 
> Can you elaborate more on your obove comment regarding effect on Real share price please.
> 
> Bob.




No problem Bobby.

I can only comment on how IG Markets works, so here goes.

With their basic platform let's say you buy 20,000 shares as a CFD in company XYZ. IG only quote the exact same prices as in the underlying share.so you buy 20,000 at the ask which is $1.00,neither you nor IG have bought any shares in XYZ, you are merely entering a contract with them.How they hedge against this I don't know, when I asked they said they try and match buyers with sellers ?? anyway going off topic now.

So in the above example you have not influenced the underlying share price one bit.

Now with their L2 dealer system (direct market access).Same scenario.You buy 20,000 shares in XYZ as a CFD, difference is this time as soon as you press the buy button they will put an order for 20,000 shares in XYZ  , so you will see a buy order for a dollar in the buy depth.Obviousy this now effects the share price directly.

This is merely the point I was making in response to Chemists post. 
__________________
The best way to save money is not to lose it.


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## chemist (1 May 2006)

*Re: Prefered CFD Providers*



			
				Porper said:
			
		

> No problem Bobby.
> 
> I can only comment on how IG Markets works, so here goes.
> 
> ...




Sure, the provider's activities may create a market impact. In fact any exposure they can't hedge internally is likely to be hedged externally (either in the physical market or via derivatives) and therefore create a market impact. How many shares in an ASX200 company would they have to buy/sell for that impact to be significant? More than the average asf forumite deals in, I reckon. 

cheers,
Chemist


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## Bobby (1 May 2006)

*Re: Prefered CFD Providers*



			
				Porper said:
			
		

> No problem Bobby.
> 
> I can only comment on how IG Markets works, so here goes.
> 
> ...




Hello again,

Thanks for that Porper, understand so far.  

Stuffed why they have both -??

Basic Platform
L2 dealer System

What I mean is why do they run both ?
Just can't understand how they protect themselves on the basic System ?

Regards Bob.


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## robots (1 May 2006)

*Re: Prefered CFD Providers*

hello,

i dont believe they hedge, these terms DMA, L2 dealer platform are all "glossy" descriptions to compliment the CFD package

how CFD's, options, futures etc can be called financial instruments or be of any use to an "investor" is beyond me

having said that, to a punter, they provide an opportunity to "punt" on shares, indices etc.

getting back to CFD providers, 

I used IG Index for some time and had tuff time getting money out second time round

thankyou
robots


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## Bobby (1 May 2006)

*Re: Prefered CFD Providers*



			
				robots said:
			
		

> hello,
> 
> i dont believe they hedge, these terms DMA, L2 dealer platform are all "glossy" descriptions to compliment the CFD package
> 
> ...



Robots hi,

This is very important to me & others , Why did you have a tuff  time getting your money out of them.

Don't hold back please .

Bob.


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## markrmau (2 May 2006)

*Re: Prefered CFD Providers*



			
				robots said:
			
		

> i dont believe they hedge, these terms DMA, L2 dealer platform are all "glossy" descriptions to compliment the CFD package
> 
> how CFD's, options, futures etc can be called financial instruments or be of any use to an "investor" is beyond me




Of course the cfd provider hedges your position in the market.

cfd's have thier uses, but 'investment' is absolutely not one of them.

They are good for experienced traders looking for a large exposure to short term market movements.

Unfortunately, they have been marketed to the masses.


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## Porper (2 May 2006)

*Re: Prefered CFD Providers*



			
				robots said:
			
		

> hello,
> 
> i dont believe they hedge, these terms DMA, L2 dealer platform are all "glossy" descriptions to compliment the CFD package





I have live data from another source and I can assure you that they do buy / sell the shares when you put in an order, I have watched this happen numerous time now.

I also agree that you can not "invest" in CFD'S as there is too much against you (interest the main one).However they are not only good for a "punt" either.Used for short term momentum trades they can give extremely good profits for little risk using guaranteed stop losses.

I would also like to hear anybody's experiences trying to get money out of IG Markets.I have heard from a few people that this is the negative with them.As I'm about to give them a bigger chunk of my capital it would be good to put these rumours to bed.


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## chemist (2 May 2006)

*Re: Prefered CFD Providers*



			
				markrmau said:
			
		

> ...
> Unfortunately, they have been marketed to the masses.




Isn't that a good thing? I mean, someone has to do the losing...

cheers,
Chemist


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## Seaking (2 May 2006)

*Re: Prefered CFD Providers*



> I would also like to hear anybody's experiences trying to get money out of IG Markets.I have heard from a few people that this is the negative with them.As I'm about to give them a bigger chunk of my capital it would be good to put these rumours to bed.




I have just organised a transfer of some capital out of my IGM CFD ac back to my main trading acount and all it took was a 30 second phone call. I would be intereasted in any bad experiences as well..


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## robots (2 May 2006)

*Re: Prefered CFD Providers*

hello,

opened account with IG Index late 04(spread betting)

only small amount of money

traded DOW and SPI going short and long, mostly monthly contracts on SPI and combination of day and month contracts on DOW

checked records and this is how it went:

1. had two wins one loss, but ahead $1,000, requested money and was sent pronto

2. then a couple of months later, 7 wins & 2 losses, ahead $1,100, requested all money and took approximatelty 2 weeks, repeated phone calls

first time money was sent, my balance on the computer went to zero immediately, 

second time, kept getting on logging in and balance was still there, telephoned "we will fix it up", still nothing happened

this went on for around 2 weeks

finally got onto Mathew who seems to be the spokesperson for IG, and balance went to zero immediately.

the impression I got was they wanted you to continue to "bet"

went and signed up with Tricom Futures Services, traded SPI a couple of times and have since stopped trading futures

oh yeh, I found there price would have these massive jumps now and again, around opening or closing of the SPI, 

I would have 200 point stop losses to cover this 

thankyou
robots


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## mlennox (2 May 2006)

*Re: Prefered CFD Providers*



			
				Porper said:
			
		

> I have live data from another source and I can assure you that they do buy / sell the shares when you put in an order, I have watched this happen numerous time now.
> 
> I also agree that you can not "invest" in CFD'S as there is too much against you (interest the main one).However they are not only good for a "punt" either.Used for short term momentum trades they can give extremely good profits for little risk using guaranteed stop losses.
> 
> I would also like to hear anybody's experiences trying to get money out of IG Markets.I have heard from a few people that this is the negative with them.As I'm about to give them a bigger chunk of my capital it would be good to put these rumours to bed.




interest definately isn't against you when going short 

i don't agree that CFDs are not investing, for someone with a small bank CFDs are the only way to invest. Using managed risk they are very safe if you know what you're doing. And never trade 100% of your bank like you would shares.


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## mlennox (2 May 2006)

*Re: Prefered CFD Providers*



			
				chemist said:
			
		

> Isn't that a good thing? I mean, someone has to do the losing...
> 
> cheers,
> Chemist




It is an excellent thing. CFDs make up 50% of investment done in the UK.

There going to become massive over here too. Once people really start hearing about how simple they are.


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## mlennox (3 May 2006)

*Re: Prefered CFD Providers*



			
				YOUNG_TRADER said:
			
		

> Hi there,
> Have been looking @ CFD's for awhile now am considering giving them a go.
> 
> I have beend looking at the main 4 providers,
> ...




i would suggest you check out some of the new players on the market. They're offering some really good deals at the moment to get people onboard.

you can find a list of these here http://cfdtools.com/au/content/view/53/50/


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## YOUNG_TRADER (3 May 2006)

*Re: Prefered CFD Providers*



			
				mlennox said:
			
		

> i would suggest you check out some of the new players on the market. They're offering some really good deals at the moment to get people onboard.
> 
> you can find a list of these here http://cfdtools.com/au/content/view/53/50/





All ready up and running with IG Markets


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## phoenixrising (3 May 2006)

*Re: Prefered CFD Providers*

Requested IG withdrawl, after 2 days nothing, so rang again.
Was asked who I spoke to, I couldn't remember.

Re-applied again, had the money straight away.

Make carefull note of who takes the call and let the person know that you have should work.


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## YOUNG_TRADER (3 May 2006)

*Re: Prefered CFD Providers*



			
				phoenixrising said:
			
		

> Requested IG withdrawl, after 2 days nothing, so rang again.
> Was asked who I spoke to, I couldn't remember.
> 
> Re-applied again, had the money straight away.
> ...




Didn't you get an account manager?

I did, I only talk to him about all matters,


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## mlennox (3 May 2006)

*Re: Prefered CFD Providers*



			
				YOUNG_TRADER said:
			
		

> Didn't you get an account manager?
> 
> I did, I only talk to him about all matters,




i'm guessing he signed up online..


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## phoenixrising (3 May 2006)

*Re: Prefered CFD Providers*



			
				YOUNG_TRADER said:
			
		

> Didn't you get an account manager?
> 
> I did, I only talk to him about all matters,




Actually didn't use the account for a while (using another cfd account) so lapsed in the non use sense. The account manager relationship dropped away.

Cheers


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## chemist (5 May 2006)

*Re: Prefered CFD Providers*



			
				mlennox said:
			
		

> It is an excellent thing. CFDs make up 50% of investment done in the UK.
> 
> There going to become massive over here too. Once people really start hearing about how simple they are.




CFDs got big in the UK because they have a tax advantage there over direct shares: no stamp duty. Stamp duty on shares was abolished in Australia in 2001 so there is no such tax advantage.

I doubt very much that CFDs will "become massive over here" under the current taxation regime.

cheers,
Chemist


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## mlennox (17 May 2006)

*Re: Prefered CFD Providers*



			
				chemist said:
			
		

> CFDs got big in the UK because they have a tax advantage there over direct shares: no stamp duty. Stamp duty on shares was abolished in Australia in 2001 so there is no such tax advantage.
> 
> I doubt very much that CFDs will "become massive over here" under the current taxation regime.
> 
> ...




Last time i checked CFDs are classified under gambling so therefore tax free, i may be wrong though...


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## RichKid (17 May 2006)

*Re: Prefered CFD Providers*



			
				mlennox said:
			
		

> Last time i checked CFDs are classified under gambling so therefore tax free, i may be wrong though...




Where exactly did you check that? It'll be big news if it is, all I know is that it's hotly disputed atm in Australia, like 'spread betting'.


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## noirua (17 May 2006)

*Re: Prefered CFD Providers*

Hi everyone, This is the answer on taxation of CFDs, I will leave it to RichKid to explain it all.

http://law.ato.gov.au/atolaw/view.htm?locid=txr/tr200515/nat/ato#p11


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## chemist (17 May 2006)

*Re: Prefered CFD Providers*



			
				mlennox said:
			
		

> Last time i checked CFDs are classified under gambling so therefore tax free, i may be wrong though...




You should check again. According to the ATO it's all income, unless your trading is non-commercial recreational, which would be pretty hard to pull off.

cheers,
chemist


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## phoenixrising (17 May 2006)

*Re: Prefered CFD Providers*

CFD's are gst free on commission, not to be confused with tax free.

Last I heard cfd tax issue was under review, comparing it to gambing, but moving it to similar to futures.

btw apparently futures has gst on commissions, go figure


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## chemist (18 May 2006)

*Re: Prefered CFD Providers*



			
				phoenixrising said:
			
		

> CFD's are gst free on commission, not to be confused with tax free.
> 
> Last I heard cfd tax issue was under review, comparing it to gambing, but moving it to similar to futures.
> 
> btw apparently futures has gst on commissions, go figure




If you bothered to read the links posted to the ATO website you'd know TR 2005/15 is not a review, but a ruling, and that CFD profits are taxable as I stated.

Chemist


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## alankew (26 May 2006)

*Re: Prefered CFD Providers*

Just a quick question for some of you guys.I am considering trading CFDs in some of the big resource stock,BHP,RIO etc.What i hope to do is catch some of the volatility that is about at the moment and on paer i would be doing well.My question is this what advantage is it to me say to buy 1000 share in BHP(via a cfd) compared to actually buying the shares outright.I hope to sell fairly quickly and then get back in etc etc!!!!!!!


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## Ageo (26 May 2006)

*Re: Prefered CFD Providers*

ok example

Lets say BHP bounces back (which eventually they will unless something major happens against them) and you were to buy 10000 shares at say $30 each. This would equal $300,000 in total but with CFD's you would only need to put up a margin which in IG's case is 5% but CMC i hear its 3% so lets go with 3% (more leverage). This now will only require you to outlay $9000.

So if you had a bank of $50,000plus it would be very convenient.

Lets say BHP jumps upto $35 in 2 months (say 60 days), you would have stood to make a profit of $50,000.

Now lets look at the positives and negatives of each

Buying shares outright:

Positives
* less downside exposure (since your outlaying the full amount the only lose 1:1 ratio)
* No interest because no loans
(thats about it hehe not sure on tax etc.. thow)

Negatives
* Full outlay required (ill leave margin loans out).
* Cash on Cash returns are limited (the cash you outlay compared to the cash you returned). $50,000 profit is 16.6% cash on cash return of $300,000.


CFD's:

Positives
* Massive upside exposure
* Only outlaying 3% compared to 100% which allows you to gear up 97%
* Cash on Cash returns are sensational, over 390% cash on cash return of $12780 (including interest which is shown below).

Negatives

*Massive downside exposure (but with good risk management you can minimise this greatly by using Stops etc..)
*Interest payable on the CFD is ($300,000 x 7.75% (RBA + 2%) / 365 days = $63 per day x 60 days = $3780.

Brokerage and other fee's have been left out for simplicity.


All in all if you are investing for capital growth and your views are strong about a particular company after doing your F/A & T/A and other research then it is more wise IMO to use CFD's simply because of the leverage capabilites.


Think of it like this, imagine being a real estate investor and having to pay the full amount of property yourself? ask yourself how many properties will you be able to own in 10 yrs time?

Like Robert Kiyosaki says "Leverage can be your best friend or worst enemy, how you use it is up to you"

Adrian


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## alankew (26 May 2006)

*Re: Prefered CFD Providers*

Adrian thanks for the reply,pretty much what i thought except forgot about the interest


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## hissho (31 May 2006)

*Re: Prefered CFD Providers*

Ageo have you decided to which you'll have a go?

I opened an account with MBL and was shocked to find majority are not GSL-offered and i can't even short a lot of the stocks!
https://www.macquariecfd.com.au/CFDMarketInfo/viewTradingStockInfo.do

basically i think my criteria are:
1) safety of my money
2) DMA
3) low margin rate (you can find 45% in MBL's website)
4) fast data update and order execution

Gosh am I asking for too much.......?

If you've found a good one please let me know. 

cheers
hissho


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## Ageo (31 May 2006)

*Re: Prefered CFD Providers*



			
				hissho said:
			
		

> Ageo have you decided to which you'll have a go?
> 
> I opened an account with MBL and was shocked to find majority are not GSL-offered and i can't even short a lot of the stocks!
> https://www.macquariecfd.com.au/CFDMarketInfo/viewTradingStockInfo.do
> ...




Hissho, i went with CMC because of the following:

* They pay interest on the funds you dont use (and of course its safe as its in a trust account).

* It is DMA (which i didnt know at 1st for shares but not sure about the others) which is 10 times better and the prices you get are from the underlying and not the Market Makers (which screw you even harder after paying commission on top!)

* The top 20 cap is 3% then the rest of the 200 is 5% and the others are 10%+ (so by far the best margins from what i have seen)

* Data is real time and order execution is super fast hence the DMA which provides extra liquidity and assures you can get in and out for the prices you want.

* GSLO and NGSLO on pretty much all the stocks (at least the top 200)

* Long and Short on basically everything (again at least the 200 and all other indicies/commodoties etc..)

Have a read of there PDS and it will explain a fair bit of it to you.

If you want to open an account let me know and ill put you onto someone that will help you.

Hope this has helped: Also another thing that attracted me was the Australian Stock Report uses CMC for CFD trading (part of there CFD report) which helps me to base my trades on theres. 

Adrian


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## hissho (31 May 2006)

*Re: Prefered CFD Providers*

Thanks Ageo

2 more questions:
1) can i do index with them?

2) are u *100% sure* that CMC is not a MM? coz more than 1 person told me they are MM and some horrible stories...how can i find out the truth?

thanks again
hissho


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## wayneL (31 May 2006)

*Re: Prefered CFD Providers*



			
				hissho said:
			
		

> 2) are u *100% sure* that CMC is not a MM? coz more than 1 person told me they are MM




from their product disclosure statement:



> 1.2 CMC Markets acts as principal
> *CMC is a market maker*, not a broker, and accordingly
> will act as a principal, not as an agent, in respect of all
> transactions with you.
> ...


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## Ageo (1 June 2006)

*Re: Prefered CFD Providers*



> Direct Access to Market Prices
> 
> CMC Markets offer exchange prices and extra liquidity to the top Australian Share CFDs.





This is on the main page, i interpret this as direct market? (For the top aus shares thow which is fine with me). But i will ask thanks for the heads up

As with the index's etc.. they have the tighest spreads i believe compared to others. So yes hissho you can do index's and other markets.


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## coyotte (1 June 2006)

*Re: Prefered CFD Providers*

with CMC what does the 20% liquidity mean ?


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## Ageo (1 June 2006)

*Re: Prefered CFD Providers*

Coy

I think they mean an extra 20% but im not sure, you can ring them and ask if you want.


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## Claudius (1 June 2006)

*Re: Prefered CFD Providers*

A couple of points.

1. Whatever instrument you use you should always look closely at who is taking the other side of your trade.
I used CMC (Australia) in the past to trade less liquid UK listed stocks.
I'm certain they weren't hedging my trades in the underlying market.
I was pair trading stocks and increasingly I was finding that the losing leg was easy to close out, but the bid/ask spread on the winning leg became so wide that it swallowed up most of the profits.

In the end, I was finding that as soon as I opened any position, their bid/ask spread on that stock would immediately widen. 
I believe that they basicly closed me down, because I was trading profitably, and my profits were their loss. You're never going to win trading against a market maker.

Admittedly, if you are trading the more liquid stocks that are relatively cheap to hedge, this shouldn't be such an issue. But the experience certainly left a bad taste in the mouth.


2. The reason CFD's are so big in the UK is all to do with tax.
In the UK purchases of shares attract a 1% stamp duty as well as capital gains on profits. 
CFD's have no stamp duty, but profits are still subject to either CGT or income taxes (depending on the whims of the local tax office).
Spread betting on the other hand is classified as gambling in the UK and is therefore CGT free. However, I believe that bookmakers have to pay a small tax on all bets which is reflected in the slightly wider spreads compared to CFD's.


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## Dr Doom (1 June 2006)

*Re: Prefered CFD Providers*

My recent experience with CMC: Trading the Aussie200 index, I could never get the quoted bid or offer as they would re-quote EVERY time. Depending on the size of contract you were opening/closing eg when the qty is 50 there is no trouble opening/closing at the screen bid/offer. But if I had a postion of 400 they would re-qoute at up to 2 pips away from the prevailing screen price, especially if I was winning in the trade. Not sure why they even bother with a screen bid/offer price!!
Make no mistake, playing CFD's with CMC you have to play it by their rules, which they appear to make up on the spot sometimes. However, it just makes it that much better when you beat the suckers at their own game.
Having said that, If you are prepared to play their game, they do have low commissions and a wide range of world markets to bet on.


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## Claudius (1 June 2006)

Yes, I'd forgotten about their constant requote.

If your trading in any size, then the low commissions CMC charge are more then offset by the poor prices you get. 

There's no doubt in my mind that CMC like their clients to be losers. And if the statistics on day-trading are anything to go by, most of them are.

I had a pretty good experience with E-Trade Pro (UK).  Obviously it helps if you have a UK bank account, although I'm not sure if it's necessary.
While their commissions are higher (AUD$30?), I never had problems getting a fair price.
They also didn't charge an ASX access fee.


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## Ageo (1 June 2006)

The spread on shares are never more than 1 pip away. So for me thats ok, indicies is where they like to move a little bit.

I can only trade and see for myself if they are worth it or night.


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## wayneL (1 June 2006)

Ageo said:
			
		

> The spread on shares are never more than 1 pip away. So for me thats ok, indicies is where they like to move a little bit.
> 
> I can only trade and see for myself if they are worth it or night.




Ageo,

If you start taking money off them, watch them start to play games with you. The requote is the classic technique they use.


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## Ageo (1 June 2006)

wayneL said:
			
		

> Ageo,
> 
> If you start taking money off them, watch them start to play games with you. The requote is the classic technique they use.






hehe wayne i dont risk more than 2% on my total capital on any 1 trade anyway. So i will see how they play. Then determine from there.....


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## robots (1 June 2006)

hello,

i believe they offer good computer platforms

a good option if taking a longer position were you are looking for a distinct up/or down swing, so pips and spreads arent as big an issue

as mentioned b4, traded with IG Index, is great for indexes around the world,

good luck dealing with them when you are profitable

nothing wrong with betting on things

thankyou
robots


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## porkpie324 (3 June 2006)

i went to a short seminar on cfd trading in auckland i was impressed so i opened an a/c with cmc markets, i like there platform and the leverage that you get, i have taken just i open position to test the water, so will see how it goes when i close it. porkpie


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## Ageo (3 June 2006)

porkpie324 said:
			
		

> i went to a short seminar on cfd trading in auckland i was impressed so i opened an a/c with cmc markets, i like there platform and the leverage that you get, i have taken just i open position to test the water, so will see how it goes when i close it. porkpie





Hi Porkpie,

What was the trade on: shares, index's ?


thanks

Adrian


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## coyotte (4 June 2006)

Think a few points have been overlooked in this thread :

with CMC
1: U can vertially trade around the world 24hrs a day

2: U are not limited to the OZ market only --- US GB CANADA JAPAN etc etc.

3: U can go Long whilest a stock is rising AND then Short while its dropping      (hence double dipping )  have been playing BHP in the UK like this --- U must watch the FX rates though 

4: Cannot see why CFDs are not suitable for investing ---- if U borrow to invest U are going to pay interest --- the main catch with CFDs in this area is that U are allways borrowing 95% --  But need to be 25% Liquid ( 5% margin + 20% additional to the margin (liquidity) @ all times --( but if U are playing Short then they are paying U interest)

5: Brokerage for trading Int Shares is around the same or cheaper than trading Oz shares in Oz --- check out how much Commsec charge for Trading Internationally !

6: No Charge for live International feeds ---- No min Buy or Sell ($500 ASX)

    ( great whilst you are a newbie --- when CMC first started in Oz there was    
    NO BROKERAGE charge -- so instead of paper trading I used to play NEM-US for just a couple of shares --- U learn so much faster when there is money involved , rather than just paper losses )


    The only Gripes I have with CFDs are that U are limited to the major stocks only , you will find no OXR here, and that Volume is not advaible , although the latter can usually be found elsewhere

    As CFDs gain in popularity and people begin to understand thier uses better then either the ASX and Oz brokers get their act together or they all be going out the back door ---- IMHO





Cheers
Coyotte


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## Ageo (4 June 2006)

coyotte said:
			
		

> 3: U can go Long whilest a stock is rising AND then Short while its dropping      (hence double dipping )  have been playing BHP in the UK like this --- U must watch the FX rates though





Hey Coy,

Thanks for the info and this is something i will be definately looking into further.

cheers

Adrian


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## coyotte (4 June 2006)

Ageo

just a bit of hard earned advice on UK markets

DO NOT SET AUTOMATIC STOP LOSSES

UK intra-day market is a hell of a lot more volitiale than OZ 
U will will be stoped out before you know whats happened
They try to be consistanly testing for auto stop-losses
best to wait untill the Close -- if then  your Stops been hit
Sell or Buy the next night 

Dual listed stocks with US will often rise rapidlly @ open then collapse and trade side ways ( with stop testing ) untill the US open 

Extrata would have to be one of the most volatile intra-day stock i have ever seen 


 Cheers


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## Ageo (4 June 2006)

Hi Coy,

Well for the mean time i will only be trading share cfd's in oz. Later on as my confidence grows i will move into international markets.


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## TraderPro (4 June 2006)

I was watching my CMC Markets MarketMaker tick over the other week and I saw this massive price discrepancy ...

If you are game enough to take the risk.. go for it. 

(BTW I still use CMC until now... all the while treading very carefully)


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## scsl (26 June 2006)

i've recently opened an account with IG Markets and have since done a few trades. this thread has been a very helpful source of info and ive really enjoyed it. 

having read the attached link to the ATO regarding taxation of CFDs, i was a bit uncertain on a few things...

- seeing as profits are treated as income (capital gains), does the 50% rule apply for CFDs held over one year?

- can we somehow deduct the interest charged? and how are dividends treated?

- seeing as it was a 2005 ruling, are there or will there be any drastic changes in the 2006 one?

- also, are there any cfd tools available online that assist with cfd tax calculations/info?

thanks,
scsl


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## mit (26 June 2006)

scsi,

STANDARD DISCLAIMER - Always seek professional advice.




			
				scsl said:
			
		

> - seeing as profits are treated as income (capital gains), does the 50% rule apply for CFDs held over one year?




I'm not sure, though, I wouldn't hold a CFD for that long anyway. If I wanted to leverage into a long term investment I would use a Margin account. A Margin account is like borrowing for a house, as your house increases in value the loan doesn't grow while with a CFD you are charged interest on the current value of the share. 



			
				scsi said:
			
		

> - can we somehow deduct the interest charged? and how are dividends treated?




You can deduct the interest and must include dividends (Though you don't get Tax credits on the dividends). 


I have an account with Macquarie and CMC. 

CMC's reporting is pretty bad. So for CMC all I do is subtract my end balance from my start balance, add any amounts I've withdrawn over the year and subtract any amounts I've deposited into the account and that is my taxable profit. (I do reconcile day by day though as I don't trust them). If I ever get audited I'll then go through the individual details then.

MIT


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## mlennox (26 June 2006)

You'll only incur tax on CFDs if the ATO sees you as a passive investor.... If you make say 50+ trades a year your now a trader and not a passive investor.

Only people i've ever heard getting taxed on CFDs are people making massive profits (i.e turning a 100k bank into a 900k bank)


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## mit (26 June 2006)

Didn't the tax office make a ruling that they were to be treated like Futures contracts?

MIT


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## mit (26 June 2006)

I found this

http://law.ato.gov.au/atolaw/view.htm?locid='TXR/TR200515/NAT/ATO'

It does mention that in some cases if you can convince the ATO that you are a gambler it is tax free. Although from the wording they seem to doubt that you could get away with it.

Who wants to be a test case? I make it a habit to keep under the ATOs radar and err on the side of caution.

MIT


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## TraderPro (26 June 2006)

mit said:
			
		

> I have an account with Macquarie and CMC.
> 
> CMC's reporting is pretty bad. So for CMC all I do is subtract my end balance from my start balance, add any amounts I've withdrawn over the year and subtract any amounts I've deposited into the account and that is my taxable profit. (I do reconcile day by day though as I don't trust them). If I ever get audited I'll then go through the individual details then.
> 
> MIT




MIT: can ask about your experience trading CFDs with Macquarie - are they good? differences? advantages and disadvantages over CMC markets?

Cheers!


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## mit (26 June 2006)

TraderPro said:
			
		

> MIT: can ask about your experience trading CFDs with Macquarie - are they good? differences? advantages and disadvantages over CMC markets?
> 
> Cheers!




Macquarie:

PROS:

DMA - This is great. I would never go back to a non DMA provider. The bid/ask spread may not seem much but:

. Quite large companies in the ASX don't have a lot of liquidity and so the spread can cost quite a bit. Lion Nathan quite often has a spread of over 7 cents. That's one percent!! 


. I have quite often put in an order at the bid and have been picked off with DMA. WIth CMC not only does the offer come down to your price it has to have the same or greater volume than you want before you will get picked off. The same has happened with the sell.

. I like the reporting. I can summarise my trading history and easily see how much I have spent on Interest and commissions. CMC the reporting sucks. To find out how much interest you paid you would need to write a program to parse the montly reports. Also the change in profit for CMC is based around GMT while Mac Bank shows the profit based on the buy price. If I was paranoid I would think that CMC was trying to make it hard to figure how the punters are going.

. They answer emails and phone calls and have called me up a few times when it looked as though I was about to make a bogus bid. CMC rarely if ever answers my emails.

CONS:

. Software is a bit clunky. Hard to explain but when you finish entering data into a dialog you need to click somewhere on the form for it to remember the last field entered.

. Only does ASX shares, no FOREX, no INDEXES or international shares.

. Commission is 0.2% against 0.1% for CMC but the DMA more than makes up for it. From July 1st Mac Bank is going down to 0.16%

. Nice to have more contingent order types.


I use Mac Bank for shares and use CMC for indexes, commodities and forex.

MIT

ps I have not used any of the other CFD providers so I can only compare Mac Bank and CMC. But I would definitely put DMA at the top of my list.


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## Hopeful (27 June 2006)

I heard that IG started a new pricing policy, you can trade from $1 per side in commission now. Is this true?


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## Bobby (27 June 2006)

CFD providers that only have *MM* will soon have to pay the punters to get any play.   

Bob.


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## scsl (27 June 2006)

Hopeful said:
			
		

> I heard that IG started a new pricing policy, you can trade from $1 per side in commission now. Is this true?



yeap, IG have reduced the minimum commission from $25 to $1. seeing as the commission is 0.2% (and $500 x 0.2% = $1), anything less than $500 will still have a commission of only $1.

*note that this is only for Australian share CFDs traded through their online platform. For trades placed over the phone or through IG's DMA platform a minimum of $10 per side will apply.


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## RichKid (27 June 2006)

mlennox said:
			
		

> You'll only incur tax on CFDs if the ATO sees you as a passive investor.... If you make say 50+ trades a year your now a trader and not a passive investor.
> 
> Only people i've ever heard getting taxed on CFDs are people making massive profits (i.e turning a 100k bank into a 900k bank)




Mlennox, 
Please be careful about how you phrase your posts. The unqualified nature of your posts which, in my view, seek to promote CFD's, suggest that you need to read and adhere more closely to the ASF posting guidelines and code of conduct. 

The taxation and legal implications regarding CFD's are still not clear imo and would normally vary by individual, as with most issues of this nature. I understand that you are not qualified to provide financial advice and that you have an inadequate knowledge of the particular circumstances of posters on ASF.

This is a gentle reminder. I have being following some of your posts on CFD's and I think it prudent to remind you and readers of your posts about the possible implications of statements such as those made by you on ASF.

ASF members should be aware that while most of what is posted here may be accurate, there is also a very real risk that it could be misleading as well. Do your own research and seek specific professional advice prior to acting or omitting to act in relation to what is posted here. Members are encouraged to politely contest any claims or views which they deem to be unreasonable.


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## troll (1 July 2006)

Try fp markets they have the largest range of DMA CFDs in Australia and are cheap, only 10bps.


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## porkpie324 (1 July 2006)

hi all, i have been using CMC markets auckland office for the past month, i have to say after some early problems mainly with start problems with the new auckland office that things have gone well, I am interested to see that there is some serious competition with brokerage charges in australia amongst providors in australia. I would be interested to hear from CMC market users in australia just what the brokerage is on share cfd's is on austalian stocks, porkpie


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## imaginator (16 July 2006)

Can someone tell me what shares do we can do cfd on?

Is there a list on the internet somewhere?

Also I'm considering opening with CMC or IG, still dont know which one...


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## coyotte (16 July 2006)

imaginator said:
			
		

> Can someone tell me what shares do we can do cfd on?
> 
> Is there a list on the internet somewhere?
> 
> Also I'm considering opening with CMC or IG, still dont know which one...





With CMC top 300 in OZ , including around 200 you can Short
Plus most of the worlds Major markets -- but only the Major Shares
( they have the stocks listed within the platform --- name NOT code )



IG top 500 in OZ  , BUT Shorts are not listed -- you either have to try and Short a stock to see if it's accepted or ring them up --- even if a stock is listed on the ASX site as being a acceptable SHORT  it may not be acceped by IG --- Plus most of the major markets as with CMC. 
( they have the stocks listed within the platform --- name NOT code )


CMC : $10 per side brokerage(commision)
       : Int shares around the same for brokerage
       : $us 200 min balance 
       : + 20% liquidity on top of the margin
       : $40 monthly fee for ASX stocks -- 5 trades monthly fee is waived.
       : Was $5000 initial deposit when i joined .

IGM  : $2 per $1000 per side brokerage 
       : Int shares can be very expesive 
       : No min balance or + liquidity
       : No monthly Fee for ASX
       : No min initial deposit



Had been with CMC since the time they stared in OZ -- found them good for trading Int Shares --- BUT if your liquidity drops belong the 20% -- they will not hesitate to close the position 


Have just changed over to IGM and  except for the lack of a list of Shorts (which is a real turn off ) I have found them up to this point a lot fairer to deal with -- closer spreads, instant execution , ussually same price as ASX



But don't forget they are both marketmakers and can set their own price , CMC do'es it constantly during the course of the day whilst IGM seems to limit it to the OPEN :


Hence my prior warning -- DO NOT SET AUTO STOPS

you can download a trial of both companys platforms , which will include the lists of instruments and shares they trade

If your going LONG only go with IG 
and i assure you going SHORT is not as simple as just reversing Long tactics
Cheers


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## mit (17 July 2006)

I've written elsewhere, but if you are doing Aussie Stocks I would only use a CFD broker that offers DMA. With the Market Makers you are always paying for the spread as well as brokerage and with limit orders you wont get filled at all unless there is market volume for the total position wanted. One little system that I run I think it made around about a 30% difference to the bottom line between CMC and Mac Bank, even though Mac Bank had a much higher brokerage.

I'm with Macquarie CFDs but I don't think they are the cheapest at the moment for DMA.

MIT


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## CanOz (14 April 2007)

Does anyone reading this at the moment use IG markets? I can't log on and they're not answering the phone????

Can someone see if their website is down for maintenance or something?

Cheers,


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## Uncle Festivus (14 April 2007)

Yes, sometimes maintenance on week-ends


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## CanOz (14 April 2007)

Uncle Festivus said:


> Yes, sometimes maintenance on week-ends




Looks like they've changed thier EOD charts, and they now have a section for commodity futures, but nothing in it yet. Thats good, it was only the other that i asked about it too.

Cheers,


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## ozymick (15 April 2007)

Hi

Anyone here using Halifax for trading
If so any feed back would be appreciated

Thanks

Michael


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## >Apocalypto< (16 April 2007)

One real positive about IG Markets is they're always improving their service on a regular basis, Advanced tick charts for one.

That does keep me from going any where, but some of their spreads are really far apart and some of the data on the charts is not good, daily and weekly on some soft commodities can't see some time frames. 

Would be great if they made a day trading spread of half a point of 1 point.

But overall I am happy.


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