Trading CFDs

[grossrealisation]

Re: Trading CFD's

hi all
Is anyone involved in a hedging fund that hedges long or short the cfd market and what the returns are.

 

[money tree]

Re: Trading CFD's

you have no business trying to set up a hedge fund (an illegal one at that). You dont have the staff, the qualifications, the experience and it seems not even a strategy (let alone a track record). It costs over $1m a year in legal expenses to run a fund. You got that?

give up this stupid pursuit now. (before ASIC deals to you)

 

[Narkov]

Re: Trading CFD's

Wow...hold up there partner. He never said he wanted to set one up. Not only that, how do you know what his financial abilities are anyway?

 

[money tree]

Re: Trading CFD's

yeah he did actually....in another thread which has been deleted because it violated ASIC laws

as for his financial abilities......cant be that good if he has to steal someone elses idea

 

[bullmarket]

Re: Trading CFD's

Hi Narkov

Wow...hold up there partner. He never said he wanted to set one up. Not only that, how do you know what his financial abilities are anyway?

Tend to agree with you. I was thinking the same thing when I read money trees' post. I certainly place no credibility in accusations made from behind a nic in an environment like this, especially when the accuser then says the posts that are supposed to support his accusations have been deleted...yeah right.... ...maybe they have, maybe they haven't, maybe they existed, maybe they didn't exist...who knows...who cares ...but from where I'm watching if anyone makes accusations or statements about what someones else allegedly said or did without providing verifiable proof to support their statements then imo they are leaving themselves wide open to being thought of as liars, since no-one is under any obligation to blindly believe any unsubstatiated statements.

Anyway, the main purpose of this post was to highlight an additional risk to CFD trading which may or may not have been mentioned so far (I haven't read all the posts in this thread). I read in the old Shares mag a few months back, when they talked about the pros and cons of CFD's, that in the unlikely event a stock is permanently suspended, delisted, goes belly-up or whatever then you could most likely lose a lot more than your original 10% or whatever stake. If a company goes belly-up you will most likely have to still repay the 90% margin you borrowed from CFD provider. So please keep this in mind if CFD trading speculative stocks.

Personally, CFD's don't suit my objectives or risk tolerances so I don't touch them, but I see they are becoming popular. I suppose for traders (and even investors I guess) they make it much easier to short trade stocks, trade market indices, foreign companies...and maybe even bet on the proverbial two flies crawling up a wall . But unless one fully understands how the mechanics behind a CFD trade work and the concept and risks associated with highly geared trades then they are very high risk imo.

Above is just food for thought and good luck to those using CFD's

bullmarket

 

[trader]

Re: Trading CFD's

Hi Narkov

Tend to agree with you. I was thinking the same thing when I read money trees' post. I certainly place no credibility in accusations made from behind a nic in an environment like this, especially when the accuser then says the posts that are supposed to support his accusations have been deleted...yeah right.... ...maybe they have, maybe they haven't, maybe they existed, maybe they didn't exist...who knows...who cares ...but from where I'm watching if anyone makes accusations or statements about what someones else allegedly said or did without providing verifiable proof to support their statements then imo they are leaving themselves wide open to being thought of as liars, since no-one is under any obligation to blindly believe any unsubstatiated statements.

Anyway, the main purpose of this post was to highlight an additional risk to CFD trading which may or may not have been mentioned so far (I haven't read all the posts in this thread). I read in the old Shares mag a few months back, when they talked about the pros and cons of CFD's, that in the unlikely event a stock is permanently suspended, delisted, goes belly-up or whatever then you could most likely lose a lot more than your original 10% or whatever stake. If a company goes belly-up you will most likely have to still repay the 90% margin you borrowed from CFD provider. So please keep this in mind if CFD trading speculative stocks.

Personally, CFD's don't suit my objectives or risk tolerances so I don't touch them, but I see they are becoming popular. I suppose for traders (and even investors I guess) they make it much easier to short trade stocks, trade market indices, foreign companies...and maybe even bet on the proverbial two flies crawling up a wall . But unless one fully understands how the mechanics behind a CFD trade work and the concept and risks associated with highly geared trades then they are very high risk imo.

Above is just food for thought and good luck to those using CFD's

bullmarket

I agree, from what I understand of CFDs even if the stock drops a bit you have lost your money. Look at CDO in 3 months they might be back up again (even though I don't think so) but if you had CDFs in this stock you might have lost your money.
PS I saw that post that TREE is talking about.

 

[bullmarket]

Re: Trading CFD's

Yes agree trader,

I would assume that before someone entered into a CFD, or any leveraged trade/investment for that matter, they realised that with gearing at say 90% a 10% rise in capital value doubles their initial stake and a 10% drop in capital value wipes out their initial stake in total.

How one manages that capital risk, re position size, is up to each individual and their objectives and risk tolerances (which are hopefully written down somewhere in a TRADING PLAN) .

Re my comments on Narkov's post, I was speaking generally and just calling things as I see them with Narkov's post being the prompt.

cheers

bullmarket

 

[grossrealisation]

Re: Trading CFD's

hi all
very interesting this post and I haven't been here for a while as I'm a little busy but money tree would know that as he seems to know more about my business then me.
couple of things
you have no business trying to set up a hedge fund (an illegal one at that).
never said I was setting up a hedge fund, if it was money tree that deleted the post maybe read it next time.
I asked if anyone was in a hedge fund and did they know what was probable returns (but money tree would know that as money tree seems to know everything in regard to this market)

You dont have the staff, I don't think he/she has any idea how many staff I have nor is it its business

the qualifications
I will judge this with contempt it deserve,
the experience
I think being in business for over 25 years and currently having 8 companies within my group does give what he or she would call experience.

and it seems not even a strategy (let alone a track record)
he,she or it knows alot more about me and my business then me.
maybe he,she or it needs to have a chat with our legal eagles and see who has a stratagy .
It costs over $1m a year in legal expenses to run a fund. You got that
money tree you seem to be able to know so much about me post an address and we will see about the mil.I'll take a barrister name that knows you if you want to keep an address 0ff the board.


give up this stupid pursuit now. (before ASIC deals to you)

asic has never nor would it have a problem with any on my companies but post an address and name and one of my eagles will have a little chat.
and as for
money tree yeah he did actually....in another thread which has been deleted because it violated ASIC laws.
I have asked the moderator to tell me the asic violations from asking if any was in a hedge fund and was told to repost which was of no use as the fund has closed( and I didn't join but money tree must know that also and he would also know that the fund is to be one of the largest in asia and is to be managed by the bank of china so I am at a loss how an asian to be listed hedge fund listed on a chinese exchange comes under asic but money tree knows so maybe he can tell us all so we will all know)
The reason for wondering returns is they don't know, they were telling me its historic was 41% so I thought I would ask any one in a fund and what are the returns.
The reason for not going for it was where the money was to be held,but again money tree would have already spoken to my accountant as he has a complete run down and should be able to post my p and l s for the last 3 years

as for his financial abilities......cant be that good if he has to steal someone elses idea.

not nice saying people steal, it gets you in deep water especially when you have no idea what you are talking about and if you post that the chinese took your idea you need to go and have a bex.
you'll be telling me you thought up the european property trust and macquarie stole your idea.
I would normally pass this type of post as just stupid put some people need to learn that just because this is a board doesn't mean you can post rubbish.
and instead of money tree should be rubbish bin :goodnight

 

[grossrealisation]

Re: Trading CFD's

hi all
with regard to this post and cfd macquarie just did a very interesting seminar in macquarie house in Sydney and went for 2hrs
I have been talking with man for some time and get along well with them.
the one thing I see with macq is the guarentee stop loss and you can set it long or short it doesn't trail and it is across 275 long and 120 short top 300 stocks.
it is direct and can be run live the platform is free but there are a whole list of different costs as you require them they seem to be getting a little aggressive in this market.
I'm looking at kicking off soon into this market I have been tracking and refining my system to work for me and as with any project check out the different possible systems and trading groups.
the coin is in the air between macq and man the draw back I have with man is that your collaterale is pooled with all investors and any down turn is taken out of the pool and with macq its your macq bank account and collateral is taken from there.
put with man I have a couple of people within man who will assist with getting familar with my stratergy.
I have been tossing the thought of an account in each, run on two computers
man don't have guarantee stop loss they have stop loss.
views please

 

[wayneL]

Re: Trading CFD's

Hi Grossrealisation.

There is no way to say this without causing offence, but here goes anyway: It is very difficult reading lots of text without proper grammar and punctuation.

I've read your posts three times and still don't really know what the hell is going on.

Also, when quoting somebody else (which I managed to deduce you are), you need to make it patently clear you are quoting someone, preferably with the "QUOTE" formatting, or using a different colour, or italics or something.

A rundown of the bulletin board code is HERE

This is not to insult, just to make sure you are making yourself clear to the reader.

Cheers

 

[blueskytrader]

Re: Trading CFD's

hello all - new here

reading this cfd thread - and the undoubted negatives of cfd's as well as the positives - any sense in trading cfd's with no leveraging - for the lower commission costs? and ease of trading 'short' when required?

i believe you can set your leverage at nil? or at least set it low?

 

[wayneL]

Re: Trading CFD's

hello all - new here

reading this cfd thread - and the undoubted negatives of cfd's as well as the positives - any sense in trading cfd's with no leveraging - for the lower commission costs? and ease of trading 'short' when required?

i believe you can set your leverage at nil? or at least set it low?

Blue sky,

I don't know if you can set it low, but you certainly can trade as if that were the case. In fact depending on your trading style, it is very wise to do so.

Cheers

 

[grossrealisation]

Re: Trading CFD's

hi all
very interesting this post and I haven't been here for a while as I'm a little busy but money tree would know that as he seems to know more about my business then me.
couple of things
"you have no business trying to set up a hedge fund (an illegal one at that)".
never said I was setting up a hedge fund,
if it was money tree that deleted the post maybe read it next time.
I asked if anyone was in a hedge fund and did they know what was probable returns (but money tree would know that as money tree seems to know everything in regard to this market)

"You dont have the staff," I don't think he/she has any idea how many staff I have nor is it its business

"the qualifications"

I will judge this with contempt it deserve,
"the experience"

I think being in business for over 25 years and currently having 8 companies within my group does give what he or she would call experience.

"and it seems not even a strategy (let alone a track record)"

he,she or it knows alot more about me and my business then me.
maybe he,she or it needs to have a chat with our legal eagles and see who has a stratagy .

"It costs over $1m a year in legal expenses to run a fund. You got that"

money tree you seem to be able to know so much about me post an address and we will see about the mil.
I'll take a barrister name that knows you if you want to keep an address 0ff the board.


"give up this stupid pursuit now. (before ASIC deals to you)"

asic has never nor would it have a problem with any on my companies but post an address and name and one of my eagles will have a little chat.
and as for
"money tree yeah he did actually....in another thread which has been deleted because it violated ASIC laws."

I have asked the moderator to tell me the asic violations from asking if anyone was in a hedge fund and was told to repost.
which was of no use as the fund has closed( and I didn't join but money tree must know that also and he would also know that the fund is to be one of the largest in asia and is to be managed by the bank of china,
so I am at a loss how an asian to be listed hedge fund listed on a chinese exchange comes under asic but money tree knows so maybe he can tell us all so we will all know)

The reason for wondering returns is they don't know,
they were telling me its historic was 41% so I thought I would ask any one in a fund and what are the returns.
The reason for not going for it was where the money was to be held,but again money tree would have already spoken to my accountant as he has a complete run down and should be able to post my p and l s for the last 3 years

"as for his financial abilities......cant be that good if he has to steal someone elses idea."

not nice saying people steal, it gets you in deep water especially when you have no idea what you are talking about and if you post that the chinese took your idea you need to go and have a bex.
you'll be telling me you thought up the european property trust and macquarie stole your idea.
I would normally pass this type of post as just stupid put some people need to learn that just because this is a board doesn't mean you can post rubbish.
and instead of money tree should be rubbish bin :goodnight

I have put quote marks around money trees quotes.

 

[cubsfan]

Re: Trading CFD's

One risk that hasn't been talked about is the financial stability of the provider.
Because CFD's are not guaranteed by the ASX, if the CFD provider was to go into voluntary administration then thats when the s*it hits the fan.

Unfortunately checking the financial status of a CFD provider is quite difficult as most are private companies. macquarie and etrade are an exception.

Also some CFD providers don't guarantee market prices so does that mean the CFD is a price maker and profiteering the difference?

 

[wayneL]

Re: Trading CFD's

One risk that hasn't been talked about is the financial stability of the provider.
Because CFD's are not guaranteed by the ASX, if the CFD provider was to go into voluntary administration then thats when the s*it hits the fan.

Unfortunately checking the financial status of a CFD provider is quite difficult as most are private companies. macquarie and etrade are an exception.

Also some CFD providers don't guarantee market prices so does that mean the CFD is a price maker and profiteering the difference?

Actually it has, but a very important point and well worth raising again.

A very important point if working with a big pot.

 

[grossrealisation]

Re: Trading CFD's

hi all

haven't seen anything from money tree for a while but in regard to his last post
and people stealing ideas maybe be needs to have a look and post his address

and instead of saying people steal ideas
The fund that I was enquiring about is now on different notice boards,
Macquarie Equinox Asia 2 and yes it is a hedge fund and no I'm not the originator and if money tree wishes to sue them for stealing ideas have a try.
have a look at the fund and if it was money tree that deleted my post then you will see that the returns were as I posted so for me to setup this type of fund is a joke.

I get information from lots of different markets but I unlike money tree check my information prior to investing and from the feedback I am receiving other people have given it a go.

most if not all the investment opportunities that come across my desk are not open market investments.
I am interested, that just because you register on a board and chalk up 150 posts or what ever.
you become a person that can work out if this is ok to postwithout understanding what you are passing judgment on.
I did mention to joe that just because some one doesn't understand this market (And I am yet to see that money tree does) then how can you delete a post that you don't understand.

hedge, caveat,cfd and debenture note trading are not some thing most traders do,
but this post was very specific and it did ask who is trading this market and as it is a stock trading platform I was not thinking I am posting to a mums and dad investor who have no clue but a trading platform.
for me the money tree's of this world need to go back to trading 1 dollar shares and leave the rest of us to ask questions on the real world of trading.
I don't have the time nor the energy to deal with the money trees of this world.
The coin is no longer in the air and I will be running with macq on cfd's but with regard to hedging I really think that any moderator/administrator if you really want people like me to come here and have alook at the site and give our opinion make sure that the people dealing with post have an understand of the subject in this case they didn't.
I don't repost, I haven't nor would I
as I don't have the time
because by the time I do ?
the deal is gone.
for the money tree's of this world they will always be the same and they will always wonder how, big he is or she is and how much he is worth or she is worth and how can I be like him or her.
well my answer is very simple you can't
this fund is closed and the next fund will be also closed to the money tree's of this world and to get into the group that gets it before its closed you have to be asked
and you haven't been.
I have.


so am I sorry for the money trees of this world
no
why
because first you must learn and deal and work your way up and just like cfd trading you must understand your market and then and only then trade.
I am moving into cfd trading and thats what this post was originally about but I put risk against return and I'm a High risk player and because of the guarentee stop loss have decided on macq.
for all those reading this post that have no idea what its about read back and for money tree get a life and when your net worth meets mine we will have a chat.
and for those who have a problem reading this post keep in the back of your mind the reason that you don't see many letters from kerry packer on ebay is he was dyslexic also and hated typing letters as people told him they couldn't understand him so he used the phone, I have two mobil's and only type on forum's.

 

[Lhotse]

Re: Trading CFD's

I, like cubsfan, am concerned about the financial stability of the CFD providers. The first rule in trading is to protect your money. I found it is interesting when you ask the providers for their financial statements.

AFter the first response 'we are big and safe, no need to worry' etc very few will provide evidence. My suggestion is to dig and dig to find out WHO you are actually dealing with - what specific entity. You can be dealing with a subsidiary of XYZ bank that is a $2 company. Many of the CFD sales people DONT KNOW who the financial entity is !!! You are relying on the fact that XYZ bank won't let their reputation suffer and allow the $2 company to go into liquidation. Look no further than the Refco debacle to see what can happen to large listed companies.

In particular I was disturbed by some of the white label providers who simply badge other providers dealing platforms. Getting information about who exactly my credit risk is with is very difficult. For example dealing with ETRADE on CFDs I am actually dealing with Man FInancial. But which entity of the MAN Group are they and what is their credit worthiness and hence my exposure? I make no comment about Man's credit worthiness but simply use it as an example to highlight the difficulty in finding out information. Sure ETRADE is listed but in reality I am not dealing with them.

I did manage to get the financials from one provider but it took some time. This doesn't guarantee my funds but gives me a greater level of comfort than dealing with some $2 company that has little or no experience in managing the high levels of risk that CFD providers are dealing with.

Anone else had simliar experiences?

Lhotse

 

[wayneL]

Re: Trading CFD's

Lhotse, cubsfan,

It looks like you both have done lots of research. Which providers do you feel are safe?

Surely Macbank would be one. Others?

Anyone else researched this?

Cheers

 

[Lhotse]

Re: Trading CFD's

WayneL

There are 4 main providers:
CMC, IG MArkets, Man FInancial, Macquarie

From what I have found all others are some kind of white label (mainly Saxo Bank which is a Danish internet bank and doesnt itself have a licence to offer CFDs here)

CMC are privately owned and had no financials to provide
IG Markets are listed in the UK and have financials to provide
Man didn't provide financials but are part of a UK listed entity and hence look fine
Macquarie seem OK and are clearly listed here

Macquarie account opening is a right pain and their GStop is ridiculous and expensive.

Man and IG Markets are both good for me.

IG has a new deal where you can trade at 0.08% on their DMA platform so long as you do $2m worth of stock in the month. Platform & Prices are free.
MAN are 0.125% if you do a mill per month otherwise you get slugged $50 pm for the platform/prices.

Lhotse

 

[mit]

Re: Trading CFD's

I have accounts with CMC and Mac Bank and Mac Bank clearly win hands down. The DMA model is far superior to the market maker model so even with the higher brokerage for Mac Bank, I think that I am far ahead of what I was doing with CMC.

In addition the reporting is more straightforward with Mac Bank. The P&L for CMC seems to be based on the time since mid-night GMT but even there it doesn't really seem to be correct and it takes a lot of time to reconcile.

If there is ever an error with Mac Bank I have been actually called up about them, CMC has had major system issues for days and never even list them on their web-site.

MIT