Hahaha, i like your moxy. I guess it's possible, but the question is, would you be able to find a buyer at 0.105? You most likely would if they saw a big buy order, but what is the liquidity like? Surely penny stock traders are switched on to tactics such as this?
I'm looking forward to more experienced traders answering this question as it's interesting
if the cfds are DMA cfds - then it wouldnt work. as the order passes onto the market like regular stock.
...
anyone know what MM cfds are priced according to?
As CFDs are based on the price of the underlying stock. Say a penny stock like CER is at 0.10 and I buy as much as I can in CFDs leveraged to the max. Then I ' buy just enough CER 'actual' stocks til the last traded price is at 0.105 and sell my CFDs at the 0.105 price... is this possible??
As CFDs are based on the price of the underlying stock. Say a penny stock like CER is at 0.10 and I buy as much as I can in CFDs leveraged to the max. Then I ' buy just enough CER 'actual' stocks til the last traded price is at 0.105 and sell my CFDs at the 0.105 price... is this possible??
Wsyiwyg, your example can be taken further; Find a illiquid stock with a large spread, put in a high bid, short the CFD, immediately pull your bid.
Put in a low ask, cover the CFD, pull your ask
However after the the first 3 or 4 attempts you will get a polite phonecall telling you they know wut u're doing
Haha, nice effort but unfortunately others have screwed the CFD providers before so they have taken measures against this.
CER example - Gettin in at $0.10, problem is bid/ask is 10c/10.5c; You can only sell on the BID not the ask. So you'll breakeven at best.
Wsyiwyg, your example can be taken further; Find a illiquid stock with a large spread, put in a high bid, short the CFD, immediately pull your bid.
Put in a low ask, cover the CFD, pull your ask
However after the the first 3 or 4 attempts you will get a polite phonecall telling you they know wut u're doing
However after the the first 3 or 4 attempts you will get a polite phonecall telling you they know wut u're doing
I take it this is from experience?
Haha, nice effort but unfortunately others have screwed the CFD providers before so they have taken measures against this.
CER example - Gettin in at $0.10, problem is bid/ask is 10c/10.5c; You can only sell on the BID not the ask. So you'll breakeven at best.
Wsyiwyg, your example can be taken further; Find a illiquid stock with a large spread, put in a high bid, short the CFD, immediately pull your bid.
Put in a low ask, cover the CFD, pull your ask
However after the the first 3 or 4 attempts you will get a polite phonecall telling you they know wut u're doing
This will work if you use 2 different providers. Long with one and short with the other. Then cover when the spread is tightened.
The potential pit fall is that your high bid / low ask will get hit before you know it. So I don't know if it is a great strategy.
You will also need a trading program that alerts you to wide spreads. I am not aware of such.
One of the rare lessons in life that actually gives you money.
What CFD brokers offer Buy Stop Limit orders? (That is, if I expect prices to move higher, I want to trigger a buy stop and only have my order filled if CFDs can be purchased within my my specified range).
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