The more I search the confused I get!

[palanquin]

The more I search the confused I get!

Could someone please explain, or point me in the direction of some good reading matter that can, the difference between the SPI that can be day traded (with CFD’s I think), SPI Futures Contracts and the ASX200 (XJO).

So far my experience has only covered shares and Cfd’s.

Thanks for your time

 

[caleb2003]

http://www.asx.com.au/

 

[palanquin]

Re: The more I search the more confused I get!

Many thanks Caleb2003.

Something about not seeing the wood for the the trees comes to mind!

 

[Trembling Hand]

The more I search the confused I get!

Could someone please explain, or point me in the direction of some good reading matter that can, the difference between the SPI that can be day traded (with CFD’s I think), SPI Futures Contracts and the ASX200 (XJO).

So far my experience has only covered shares and Cfd’s.

Thanks for your time

The XJO is an ASX listed indices made up of 200 companies and is not tradeable.

The only thing that is the SPI is what is traded on the SFE which you have to use a Futures broker for. It is based on the price of the ASX 200. You are trading against other traders which take the other side of your trade. The market has a independent overseer in the ASX. You will have to pay $5 to $10 per transaction as a retail customer. The mechanics of the trade are very much like a stock. Where you have different traders placing orders at different levels. when a buyer and sell have the same price you get a trade. and you usually need about 4% margin to open a position.

What the CFD providers are offering CFD gets its price from either the SPI futures or the ASX200 indices. It is not traded on an open market but when you open a position the CFD provider takes the other side. They mostly set the rules for the trade including the Spread you will have to pay and then tell you it is brokerage free when you are normally paying big time for the large spread. They seem to use words that makes it seem like you are trading the SPI or the indices but it is just a synthetic market.

In my opinion the CFDs are OK for learning but the Futures are 1000000 times better.