Trading CFDs

[wayneL]

Re: Trading CFD's

Thanks Lhotse.....

OK so Man is ok

What about Man via Etrade. The reason I ask is that through them you can also trade stocks and options via the one account/platform... and I really like that webiress platform.

Any experiences? Anyone?

Cheers

 

[wayneL]

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

CMC is the root cause of me never using CFD's when trading ASX (they were the only ones available at the time) Without printing anything libellous, er....let's just say I've never personally liked their setup.

Cheeers

 

[wayneL]

Re: Trading CFD's

Thanks Lhotse.....

OK so Man is ok

What about Man via Etrade. The reason I ask is that through them you can also trade stocks and options via the one account/platform... and I really like that webiress platform.

Any experiences? Anyone?

Cheers

I see man uses webiress too...hmmmm

 

[sails]

Re: Trading CFD's

Thanks Lhotse.....

OK so Man is ok

What about Man via Etrade. The reason I ask is that through them you can also trade stocks and options via the one account/platform... and I really like that webiress platform.

Any experiences? Anyone?

Cheers

Hi Wayne,

I think you will find that option fees are very high with etrade when compared to OX. I use the combination of Morrisons (for Iress) and OX (where I do most of my option trading and where I also get frequent trader discount). I stopped trading with etrade a couple of years ago due to the fees and, also at the time, you could not enter an option order directly through Iress. They provided another window (accessible through Iress) where option orders were processed through their website and sometimes very slow to happen. Things might be different now though.

I don't trade CFD's so can't help much there - but have looked at it to hedge option trades, and found the fees are unaceptable when compared to the flat rates I get with OX and Morrisons. For example, to just buy 5000 CBA CFD's (covering 5 options)would be approx $220,000 worth of underlying -multiply that by their percentage based fees! Margin lending with Morrisons is a much better deal where I get the $30 flat fee.

Anyway, welcome to the world of daylight trading! Better lifestyle, but fees are another story. Let me know if I can help with any info re the aussie market.

Cheers,
Margaret.

 

[wayneL]

Re: Trading CFD's

Margaret,

Thanks for that info....appreciated.

 

[Would Be Trader]

Re: Trading CFD's

Does anybody know anything about Sonray Capital Markets?

They use the Saxo Bank platform like GET. They offer 10% margin for both long & shorts on virtually all of the ASX200 and quite a few of the ASX300.

I have been with them for few months and I find their service & platform pretty good.

However, after reading the various warnings in this thread about the importance of financial strenght of the providers, and the fact that I don't hear much about them in this and other forums (suggesting that they are not very well known), I am getting nervous and seriously considering my alternatives.

Any advice will be greatly appreciated

Regards to all

WBT

 

[wayneL]

Re: Trading CFD's

Hi Wayne,

I think you will find that option fees are very high with etrade when compared to OX. I use the combination of Morrisons (for Iress) and OX (where I do most of my option trading and where I also get frequent trader discount). I stopped trading with etrade a couple of years ago due to the fees and, also at the time, you could not enter an option order directly through Iress. They provided another window (accessible through Iress) where option orders were processed through their website and sometimes very slow to happen. Things might be different now though.

I don't trade CFD's so can't help much there - but have looked at it to hedge option trades, and found the fees are unaceptable when compared to the flat rates I get with OX and Morrisons. For example, to just buy 5000 CBA CFD's (covering 5 options)would be approx $220,000 worth of underlying -multiply that by their percentage based fees! Margin lending with Morrisons is a much better deal where I get the $30 flat fee.

Anyway, welcome to the world of daylight trading! Better lifestyle, but fees are another story. Let me know if I can help with any info re the aussie market.

Cheers,
Margaret.

Margaret,

Thanks for reminding me about OX. Having had a look around the brokers, they are the best for options by a ludicrous margin. When will Aussie online options brokers get their act together?

Morrisons look great, they have basically replaced AOTonline. I would have no hesitation if I was only intrested in shares. But CFDs look attractive for my style of trading.

I was trying to contain all my trading to 2 accounts, 1 futures and 1 for shares/CFDs and options. Looks like I'll have to have 3 accounts.

Cheers

 

[Lhotse]

Re: Trading CFD's

Hi WouldbeTrader

I would ask the following questions if you are uncomfortable.

1. Who is my contract with? ie the actual entity. (I think its Sonray but not sure) Dont know who owns Sonray but you can probably do a company search.
2. How much capital do they have? Do they have a balance sheet they can show you?
3. What happens if they experience a large client loss? Or a September 11 scenario? Or internal fraud?
4. Who is holding my money and how safe is it?

My further advice is to get anything in writing. If it simply a saleman telling you something its not worth a cracker. I don't mean to sound patronising but some of the CFD sales people are... lets just say get it in writing!

Lhotse

 

[finnsk]

Re: Trading CFD's

Does any of you have any experience with fpmarkets I got offered a 0.1% trading fee on any monthly trading value.
They are using webIRESS and is DMA not market maker.

Thanks in advance

Finnsk

 

[Lachlan6]

Re: Trading CFD's

G'Day Finnsk. I have only just started trading CFD's and find the product AMAZING to say the very least. Just finished reading a great book by Catherine Davey who makes some money trading short term, CFD's. She has a great system, whereby she follows basic support and resistance and trades by these basic rules holding stocks for at the longest two weeks. She tends to only trade in a handful of top 150 stocks, thereby paying less margin and also becoming more familiar with these companies movements on the chart.

In terms of using FP Markets, has been fine so far, great broker, and the IRESS system is brilliant. You do have to pay for it though, something I was initially reluctant to do, but now trading CFD's will not complain for a second. I am however aware of the possible MASSIVE downside however, if prudent stop losses are used then these will be minimised. Davey trades in some instances foolishly however on the whole is very careful not to over capitalise. Exiting times ahead, bring on CFD's

 

[LOVE_OPTION]

Re: Trading CFD's

quick question to all

which is a better way to go for day trading, CFD or Future. regarding profit, speed of return.

also i understand all the leverage and risk. i just want to branch out from my option trading.

 

[Broadside]

Re: Trading CFD's

It is a very interesting thread, I use CMC and made a little money the last 12 months betting on the NZD falling vs the Aussie and in the last 3 weeks went into MGX (already had a heap of physical shares) averaging up cfd from 66 cents all the way to 93 today....when you can average up using cfd it is a great product your equity increases which in turn allows you to get more shares, tempting to overextend though, you have to be careful.

I have only used half the equity I have built in this account, that is as far as I am prepared to go, if MGX plunges I have stop losses which will still see me far ahead of my average entry point. But I have been lucky and won't push my luck like this again, suffice to say I had great confidence in MGX's prospects and backed my instincts. But most shares don't explode the way MGX has recently, I probably got lucky and won't do this again. But I digress, the trades I have made in MGX using cfds (I now have about 8000 shares in MGX using cfd) I have never seen them placed in the underlying market (I get market depth from my online broker at the same time I place a trade with cmc to make sure the spread is okay).

CFD has always offered me the market spread in MGX yet I never see the depth in SEATS change so...how do they cover their risk?? I have read elsewhere they choose to cover sometimes in the underlying market depending on the trader's record, this sounds wrong, at least I hope so it is highly unscientific. Now if CMC are "spread betters" does this mean they don't hedge their positions in the underlying market....if most people use CFDs to go long then spread betters must lose heaps of money in a rapidly rising market or a rapidly rising stock, is this correct?

I can't get my head around CMC's business model, that is what concerns me, and also what would happen in the event of extreme market volatility, would the capital I have built up be safe? Mind you the beauty of the cfd providers is the enormous flexibility they give in times of such volatility.

Maybe I will take some profits in MGX tomorrow and take some equity out.

 

[Broadside]

Re: Trading CFD's

oops I meant 80,000 shares I should have previewed post

 

[robots]

Re: Trading CFD's

hello,

I dont believe they hedge or buy the physical stock for one moment.

Imagine there looking for people to lose more than win like most betting houses.

I dealt with IG Index on indices for several months, made small amount of money and then found it quite tedious to get money out from IG Index on second time.

They wouldnt reset my balance on platform to $0.00 (or transfer to bank account) for approximately 2 weeks.

Hoping i would place some "losing" positions I believe.

Would love to here from a CFD provider rearding this.

Thankyou
robots

 

[mlennox]

Re: Trading CFD's

Direct Market Access (DMA) & Market Makers (MM)
When trading with a CFD provider who offers DMA, when a trader places a CFD order, the order is directly executed in the actual market, without intervention from a broker’s trading desk. A Market Maker is an institution which quotes firm buy and sell prices for a financial instrument, hoping to create revenue through the spread. The spread is the difference between the price the market maker is willing to buy a security and the price at which they are prepared to sell it. In simple terms the difference between the bid and offer.
PLEASE NOTE:

To determine the real cost of trading, if prices are requoted by Market Makers there may be a spread built into the bid and offer prices effectively increasing the cost of trading. Furthermore, with DMA you will not be subject to additional time delays as is required if market makers have to re-quote their spreads, especially when there is a large order to be placed. We note however, that with Direct Market Providers, they will charge a higher brokerage than for Spread Providers, but the Spread itself may exceed the difference in brokerage.

taken from www.cfdtools.com

answer your question?

 

[Broadside]

Re: Trading CFD's

thankyou mlennox but my understanding is that CMC are marketmakers...but the spread they offer me is the same as the underlying market, certainly in the shares I have traded with them: MGX, TLS, BDG, PDN, BSG, CSM

robots thank you for your answer - but this hardly seems a scientific way for them to make money or cover their risk - in a casino the odds are in favour of the house, on the share market - even after transaction and interest costs - when the market rises rapidly the house must be losing (assuming most go long).....unless they have some way of hedging their position. I guess they must have deep pockets to ride out the current boom. Either that or there must be a lot more dumb punters than smart ones....I might go to their next seminar and ask them directly.

 

[robots]

Re: Trading CFD's

hello,

a lot of people are always looking for a fall and with big rises people expect/hope for a fall, but it may not occur and hence their punt has not worked

if you go long MGX (for example), are they shorting the stock with another CFD provider, or with themselves?

why would the provider buy the stock if your making the profits?

looking for more understanding on CFD's

thankyou

robots

 

[professor_frink]

Re: Trading CFD's

robots thank you for your answer - but this hardly seems a scientific way for them to make money or cover their risk - in a casino the odds are in favour of the house, on the share market - even after transaction and interest costs - when the market rises rapidly the house must be losing (assuming most go long)

they're the house- they don't lose. like in a casino, there will be times when the punters win, but over time, the house will always win. When you factor in the high brokerage and interest payments on a cfd position, you aren't that much better than being long a call option- a position that will be slowly eaten up over time if your not very right, very quickly. Not saying it can't be done- many people do, but you'll find most of those people have very good stop loss and money management procedures in place to negate some of the leverage and interest concerns

I guess they must have deep pockets to ride out the current boom. Either that or there must be a lot more dumb punters than smart ones....I might go to their next seminar and ask them directly.

Your bang on the money with the last part of that statement Broadside- alot of stupid people in this world- give them a highly leveraged instrument and in alot of cases it's only a matter of time

 

[Broadside]

Re: Trading CFD's

sorry to say the house always wins does not give me confidence in a cfd provider's ability to cover its risk, granted there are other ways to get the same exposure using options etc but not all stocks offered for cfd are ETOs, cheers professor.

 

[Broadside]

Re: Trading CFD's

and the brokerage is not high, $10 per trade and the spread is same as SEATS, a can see them burning in a rapidly rising market unless a significant proportion of their customers are shorting