IG Markets trading and CFDs

[Student of Gann]

i am considering opening up a small account , I assume that the IG platform just deals with cfds is that correct?
Hypothetically how would i trade a CFD contract on this example or is there another instrument that i would use to enter these trades .Example No 1 : lets say I entered a sell order on the SP500 at 4469 and wanted to set my stop at 4489 which is risking 20 points ( how much would each point or tick = in risk ) is this dependent upon the size and number of contracts taken and what would be a guide as to how many contracts to take ( or cfd contracts ) to take on a small account which would be sensible and how much risk per point on one contract so if I get stopped out for an 18 point loss on one one contract what are the calculations thanks .

 

[Student of Gann]

I have just had a look at the dropdown information box trying to work out what it means in terms of CFD structure​

​

Dealing​

Minimum size = what does this refer to ( the number of contracts )	20
Contract size per point = AUD 1	AUD 1
One point means	0
Value of one point	AUD 1
Minimum stop distance	5
Minimum guaranteed stop distance	8.0%
Slippage factor	50.0%

 

[Joules MM1]

one one contract what are the calculations thanks .

What are IG's shares CFD product details?

What are IG's shares CFD product details?

www.ig.com

edit, correct link:

What are IG's indices CFD product details?

What are IG's indices CFD product details?

www.ig.com

 

[Student of Gann]

take wheat as an example .
minimum size = 20 ( i am assuming that this is 20 CFD contracts ? )
contract size per point = 1 AUD ( so 20CFD wheat contracts x 1.00 = 20.00 per point ? )
I read about guaranteed stops that close you out at the level requested regardless of whether the market gaps but you have to pay a premium for this service . i believe this would be a good option

position size contracts 0 - 5970 = 10% ( so if I am strictly taking the minimum size of 20CFDS for this wheat trade whats the margin requirement ?

Example 2 : take 50 CFDS ( i assume I would just enter 50 under the tab where it says contracts ? this would equal 50.00 per point so how do i calculate the margin required for this trade . as a hypothetical example if i sold wheat at 719 and the price dropped to 709 which is 10 points it would look like this 10 pts x 50.00 = 500.00 is that correct thanks

Dealing​

Minimum size	20
Contract size per point	AUD 1
One point means	0
Value of one point	AUD 1
Minimum stop distance	5
Minimum guaranteed stop distance	8.0%
Slippage factor	50.0%

Codes​

Margin requirements​

Margins are calculated according to tiered margin factors, based on the size of your aggregate position:

Tier	Position Size (Contracts)	Deposit Factor
1	0 - 5940	10%
2	5940 - 11880	10%
3	11880 - 17820	10%
4	17820 +	10%

We may offer reduced margin on tier 1 positions with a non-guaranteed stop attached. This does not apply to higher tiers, where margin is cal

 

[Student of Gann]

ok i think i am understanding things , just had a look at the SP500
which has a minimum of 10 contracts = 10.00 per point so the margin position comes in at 2209AUD
so working on the range of one bar just to acquaint myself with the figures ( 17th September bar has a range of 38 points x 10.00 = 380.00


Size
AUD(A$)
+-
contracts
min: 10
A$10.00 per point

Stop
Normal

+-
pts away

min: 2
- / -

Limit
+-
pts away

- / -

Net offForce open


Margin
A$2,209.52
Resulting position
+10
Fees and charges apply. Learn more

 

[KevinBB]

Hello SOG

Just under one year ago I started a similar project to which you are undergoing now. I used CMC as the broker, but I imagine that IG will do the same thing. I still have both accounts, but they are not active.

Both IG and CMC have very good demo accounts. Yes, the calculations you are doing above are a very good step, and they will help understand exactly what is going on, but there is no replacement for testing them in the demo account. I say this because sometimes the multiplier can be different to that advertised. I found this mainly with the agricultural products, so my system was giving me minuscule orders until I woke up to the fact that the multiplier was different.

I found that small positions in quite a few products (between 25 and 30) gave me enough diversification to beat the CFD provider. I kept margin between 20% and 30% of account value, so was never in trouble there. Have fun with this project.

KH

 

[Student of Gann]

Thanks I was looking at BHP
As an example Buy 70 shares at 39.16 it is showing that 548.00 margin is required but how much each point be worth ?

SELL
39.160
BUY
39.160
Size
AUD(A$)
+-
shares
min: 1


Stop
Normal

+-
pts away

min: 0.1
- / -

Limit
+-
pts away

- / -

Net offForce open

 

[cynic]

Thanks I was looking at BHP
As an example Buy 70 shares at 39.16 it is showing that 548.00 margin is required but how much each point be worth ?

SELL
39.160
BUY
39.160
Size
AUD(A$)
+-
shares
min: 1


Stop
Normal

+-
pts away

min: 0.1
- / -

Limit
+-
pts away

- / -

Net offForce open

Presuming a margin rate of 20%, the position described is the CFD equivalent of quantity 70 shares in the underlying (namely BHP).

Therefore every cent of movement, in the underlying instrument, should equate to a 70 cent movement in the aforementioned position.

A quick, simple and cost free, way to test this, would be to (as per KevinBB's suggestion) open a position on a demo account and observe its behaviour when the market is trading.

 

[tidy8]

Hi everyone,

I trade the US stock market.
And have been using Interactive Brokers for some time now.

I've been looking at some of the big CFD Brokers to see what they can offer.


All the CFD Brokers state that CFD's aren't tied to the actual stock or instrument.
So technically there should be no limit to the amount of shares that you can actually trade.
Provided you have sufficient funds in your account. And can manage your margins.

If it isn't tied to the actual instrument.
Then how come they can stop short selling due to unborrowable stock.

This makes absolutely no sense.

I recently read this on the IG broker site.

"When shares in a company become unborrowable, the traditional means of short-selling them is impossible. Using CFDs for short-selling can give you a much more flexible method of shorting, because you are not selling the actual shares, but speculating on the price movements."

I started to put orders on stocks.
And it won't let me put a trade on.

It states " Unborrowable Stock - this market may not be sold to open due to stock borrowing restrictions in the underlying market...."

Talk about Contradiction......

 

[KevinBB]

One thing we have to remember when trading CFDs is that we aren't trading a market, we are actually placing a bet with the CFD provider. Just like any "bookie", the CFD provider will want to "lay off" as much as they can. Lack of a market is something we just have to accept when trading these instruments.

(I have used IG and CMC in the past when I was trading CFDs)

KH

 

[peter2]

Ethical CFD providers will offset their net position on a stock near the end of day (close). If they're unable to establish a short position in a stock, they won't let their customers do it either.

We don't want to be a customer of a CFD provider that doesn't offset their net position with real equity. (Opes Prime, Sonray)

 

[InsvestoBoy]

Ethical CFD providers will offset their net position on a stock near the end of day (close). If they're unable to establish a short position in a stock, they won't let their customers do it either.

We don't want to be a customer of a CFD provider that doesn't offset their net position with real equity. (Opes Prime, Sonray)

They are definitely not waiting until the end of day @peter2. If they can't match the order against another customer or hedge it off in the underlying market or its derivatives, you can guarantee your spread will spike further to compensate for the risk of them making that market for you.