Hi, need some guidance please. Never have short sold stocks before only long but want to start getting involved in ASX shorting. Is using CFD's the only and or best way? I have accounts for long trades at CMC for SMSF and IB for US and Commsec from years ago. Can IB be used for ASX CFD's to go short? I have read that there is limited supply on stocks to go short with and not sure what that means. Any recos on suitable brokers? Apologies, there are a few questions in there but as you can see I need some help. Thank you.
Short selling using CFDs
- Thread starter steven01
- Start date
Commsec have OTC CFDs now. They use igmarkets as the hedging counterparty and expose you to the same counterparty risk (igmarkets). Therefore, I figured I may as well just use igmarkets. Commsec always finds a way to rip you off on commissions. It's not possible to make money using commsec unless you buy and hold or have a very large portfolio to compensate for all the fees they have.
Be wary too of CFD providers who tell you that their spread won't necessarily match the underlying and their settlement price won't necessarily match the underlying, unless you use DMA. Sounds like some sort of dodgy scam to me. How do you have a contract for the difference in price of an underlying if the difference they calculate is not necessarily what that underlying is. It's a contract then for the difference of what they want you to have. A proper CFD provider would take out the same position in the market as you made to provide the hedge and they wouldn't hedge with their client's own money. Therefore, your CFD provider should be indifferent to what instruments you choose to long or short!
Be wary too of CFD providers who tell you that their spread won't necessarily match the underlying and their settlement price won't necessarily match the underlying, unless you use DMA. Sounds like some sort of dodgy scam to me. How do you have a contract for the difference in price of an underlying if the difference they calculate is not necessarily what that underlying is. It's a contract then for the difference of what they want you to have. A proper CFD provider would take out the same position in the market as you made to provide the hedge and they wouldn't hedge with their client's own money. Therefore, your CFD provider should be indifferent to what instruments you choose to long or short!
skc
Goldmember
- Joined
- 12 August 2008
- Posts
- 8,277
- Reactions
- 329
Commsec used to white label MF Global for their OTC CFD offering. When MFGA went under, Commsec customers were made whole straight away. While MFG's own customers waited over a year before they had their funds returned.
While there's no guarantee that Commsec will do the same in the event of a IG default, there is perhaps a slight improvement in the counterparty risks involved.
