Unexpected IG Markets Fees

[kingink]

Hi everyone,

So I set up an IG account for some small time CFD trading.

I'm a little confused and pissed because it's charging me $17 a pop to open AND close trades??

I was trading Nasdaq shares. Isn't the spread supposed to be more like 2c a share? (I was trading small).

Doesn't the broker usually just takes a cut by adding a small pip difference to the displaying prices??

Can someone enlighten me, why did it cost me almost $120 to open and close 3 trades???

It'd be cheaper to trade CFD's on friggin Commsec.

 

[pixel]

Re: Ridiculous IG Broker Fees

Hi everyone,

So I set up an IG account for some small time CFD trading.

I'm a little confused and pissed because it's charging me $17 a pop to open AND close trades??

I was trading Nasdaq shares. Isn't the spread supposed to be more like 2c a share? (I was trading small).

Doesn't the broker usually just takes a cut by adding a small pip difference to the displaying prices??

Can someone enlighten me, why did it cost me almost $120 to open and close 3 trades???

It'd be cheaper to trade CFD's on friggin Commsec.

CFD providers use different models. Some charge interest on the margin loan. Others manipulate the spread. And then there are providers that place your order straight through into the Market. The latter ones need to cover the associated brokerage like every "normal" broker does, at some low rate, but subject to a minimum.

Last time I researched IG, they were offering DMA; fellow traders who use them were rather appreciative of that model as the most honest and transparent - non-manipulative - charging model. In any case, check the PDS, I'm sure you will find the exact calculation explained in detail.
Below is just a random example from their most current PDS:

Commission £ 20

Value of position x 0.10% (Minimum £10)

(2000 x 2.90) x 0.10% = £5.8

(2000 x 2.9485) x 0.10% = £5.90
Funding: £0.48

 

[skyQuake]

Re: Ridiculous IG Broker Fees

Which stock/index did you trade, and was it long/short, was it a guaranteed stop etc

 

[kingink]

Re: Ridiculous IG Markets Broker Fees

Hey again,

Ok so yeah I basically just threw $200 in the account quickly to see how it operated.

I think I was shorting yahoo or something haha I was being careless (silly boy) normal stops.

I was hoping to trade smaller amounts, just a few thousand but it seems I need deeper pockets for stepping into the derivatives markets.

Anyhow since I'm such a small player I think it's best to just stick with what I'm enjoying, which is stacking my chips in companies I feel comfortable with.

The CFD market is bringing back those stressful memories from when I traded forex... never really being sure wtf is going to happen hahaha. I mean at least with stocks you can be more certain with what's going on in a company. The way it presents itself to me feels like CFD's are utilised more as a day trading thing?

Novice at work so feel free to rip into me hahaha

 

[kingink]

Re: Ridiculous IG Markets Broker Fees

I mean I understand you can trade stock on it, just something about those smaller brokers compared to commsec seems like they try to draw every cent they can out of your trades.... Maybe I'm para...

Maybe if you guys could give me some insight into the best way to trade small lots?

Or just forget it and stack my aussie stock portfolio?

 

[skc]

Hi everyone,

So I set up an IG account for some small time CFD trading.

I'm a little confused and pissed because it's charging me $17 a pop to open AND close trades??

I was trading Nasdaq shares. Isn't the spread supposed to be more like 2c a share? (I was trading small).

Doesn't the broker usually just takes a cut by adding a small pip difference to the displaying prices??

Can someone enlighten me, why did it cost me almost $120 to open and close 3 trades???

It'd be cheaper to trade CFD's on friggin Commsec.

What is the difference between what they said (in their PDS) they are charging you vs how they actually charged you?

Or may be you just assumed that they charge a spread rather than a commission?

 

[pixel]

I mean I understand you can trade stock on it, just something about those smaller brokers compared to commsec seems like they try to draw every cent they can out of your trades.... Maybe I'm para...

Maybe if you guys could give me some insight into the best way to trade small lots?

Or just forget it and stack my aussie stock portfolio?

Hi again, kingink;

To be fair to IG, I've changed the thread title. I am sure when you compare their charges to others, you'll find them far less ridiculous. Also, as a noob to CFDs, you'd probably be better advised to stick with less risky instruments. Study the PDS and be absolutely certain you understand what you sign up for.

Yes, Commsec may have about 50% of the retail trading market stitched up, but don't think just because they're the biggest, they're giving things away. If you believe certain press reports, nothing could be further from the truth.

As to trading small lots: Every broker has a minimum brokerage; but I wouldn't take that as the main selection criterion. It's more important how quickly a transaction gets through to the market. What's the point of saving a few cents, even Dollars, brokerage, when you can't get the best price because your order is sitting for minutes in a "Review" queue? Or can you access the Centrepoint "best" trade without extra surcharge? Can you take several small bites - add when your entry decision turns out right - for the one contract note?
Last not least: Many brokers will let you set up a trial or training account where you can trade in real time, except that your orders don't go through to the market.

Good luck and Happy Studies

 

[barney]

Their fee for US shares is 2 cents per share I think? That would make a 1000 share transaction cost $20 If you are trading a $2 Company that not good, but I guess if you traded 1000 Apple etc, the $20 fee is pretty good.

 

[skc]

Their fee for US shares is 2 cents per share I think? That would make a 1000 share transaction cost $20 If you are trading a $2 Company that not good, but I guess if you traded 1000 Apple etc, the $20 fee is pretty good.

Yes. 2c per share with $15 minimum.

Also, I don't think there is DMA US stock CFDs... but I stand corrected.