What is your opinion of CFDs?

[nulla nulla]

My honest opinion of CFD's is that they are a great tool for CFD providers to make money....... the providers rake in the cash.

+1 I looked at a few and came away with the impression that you would basically be dealing with a book maker who would betting against you. Worse, if it went your way you could be stopped out for a variety of reasons to limit their exposure to losses.

 

[AlterEgo]

+1 I looked at a few and came away with the impression that you would basically be dealing with a book maker who would betting against you. Worse, if it went your way you could be stopped out for a variety of reasons to limit their exposure to losses.

Only true for Market Maker CFD's, not DMA CFD's.

 

[captain black]

I'd also encourage anyone who has an account with a CFD provider in Australia to look closely at how the bankruptcy of MF Global and the return of client funds has played out. It has taken a year for 78% of funds to be returned to clients in Australia. Technically there is no money missing from client segregated accounts in Australia, it's simply that current client protection laws are woefully inadequate.

I'll be writing a more detailed post on this soon but in the meantime it's worthwhile reading through the court judgements in relation to MF Global, your money is not protected in the way you may think it is.

 

[Trembling Hand]

My honest opinion of CFD's is that they are a great tool for CFD providers to make money, the attraction for the punters is the leverage and thus massive potential profits..but for most that potential will only ever be just that...potential, while the providers rake in the cash.

+1 I looked at a few and came away with the impression that you would basically be dealing with a book maker who would betting against you. Worse, if it went your way you could be stopped out for a variety of reasons to limit their exposure to losses.

Thats because you don't understand how to use leverage, like most CFD users, and you don't know how the price is derived from the underling instrument. there is nothing sinister or bad about them its the application that people use that is the problem but thats no diff to any thing in the market.

 

[nulla nulla]

Thats because you don't understand how to use leverage......

I have a very good grasp of leverage thanks TH. I have used it every day since January 2009 to varios levels. i am more than aware of the increased risks associated with being "over leveraged' and leveraging CFD's, imo, are a recipe for disaster particularly for novice traders. Each to his own though and I am not trolling for an argument. I just expressed an opinion.

 

[Trembling Hand]

I have a very good grasp of leverage thanks TH. I have used it every day since January 2009 to varios levels. i am more than aware of the increased risks associated with being "over leveraged' and leveraging CFD's, imo, are a recipe for disaster particularly for novice traders. Each to his own though and I am not trolling for an argument. I just expressed an opinion.

Being "over leveraged" is not how you use CFDs or any type of leveraged instrument. Therefore the leverage is of no danger if using it correctly. Very simple.

 

[nulla nulla]

Being "over leveraged" is not how you use CFDs or any type of leveraged instrument. Therefore the leverage is of no danger if using it correctly. Very simple.

So simple in fact that only 95% of traders fail. Of course not all of them traded cfd's or were over leveraged. But then we digress.

The original poster invited all and sundry to give their opinions and we have both done just that.

 

[So_Cynical]

+1 I looked at a few and came away with the impression that you would basically be dealing with a book maker who would betting against you. Worse, if it went your way you could be stopped out for a variety of reasons to limit their exposure to losses.

Yep they are financial services bookies...just no other way to genuinely think about MM CFD's

Thats because you don't understand how to use leverage, like most CFD users, and you don't know how the price is derived from the underling instrument. there is nothing sinister or bad about them its the application that people use that is the problem but that's no diff to any thing in the market.

I didn't say they were evil or sinister and im well aware what leverage is and how to use it..MM CFD's are for punters, short term 1 or 2 spins of the wheel punters..fine if that's what your after.