Preferred CFD Providers

[Ageo]

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

 

[coyotte]

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

 

[Ageo]

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.

 

[TraderPro]

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)

 

[scsl]

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

 

[mit]

scsi,

STANDARD DISCLAIMER - Always seek professional advice.

- 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.

- 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

 

[mlennox]

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)

 

[mit]

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

MIT

 

[mit]

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

 

[TraderPro]

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!

 

[mit]

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.

 

[Hopeful]

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

 

[Bobby]

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

Bob.

 

[scsl]

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.

 

[RichKid]

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.

 

[troll]

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

 

[porkpie324]

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

 

[imaginator]

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...

 

[coyotte]

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

 

[mit]

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