Is there a fee free CFD provider?

ROE · 17 May 2007

I want to get into CFDs but I don't think i will do it that often initially
probably once in a while to get a hang of it. Most CFDs provider charge a fee if you dont trade often is there one that doesnt charge fee and pay just commission when you trade?

yonnie · 20 May 2007

there are quite a few cfd providers that dont charge platform fees.

marketech is one, but google cfd providers and I`m sure you get a website where they compare them.

ROE · 21 May 2007

Is marketech any good? are they reliable?

yonnie · 21 May 2007

somebody used Marketech and was quite happy with them but just use Marketech in the search function

fill · 26 May 2007

ROE,
most cfd providers have a demonstration platform you can trial for free.

fill

yonnie · 1 June 2007

the fees are not that important.

its the interest charges that will kill you on long-term holdings, up to 36% pa

CFD · 2 June 2007

I assume IG would also do what Roe is looking for.

How does the cash rate plus 3% finish up costing you 36%?

yonnie · 3 June 2007

CFD said:
I assume IG would also do what Roe is looking for.

How does the cash rate plus 3% finish up costing you 36%?

It could be CFD if you are a long-term investor.

Say you buy a CFD contract with 50% margin @ 6.5% + 3% = 9.5%

Because your account will be debited every day the interest rate is not 9.5% but more like 10.5% AND over the whole position, so you are paying 21% p.a. right there over the money you are really borrowing.

Suppose your position doubles in value over a year, which is not uncommon, you again pay interest over the value of the position and your interest rate is now 42% over the borrowed part of your position.

pento1999 · 6 June 2007

Hi,

I use Pacific Trader. At www.pacifictrader.com.au they suit me as i'm new to cfds. They dont charge an account fee and there is no minimum account balance but the main thing is that on asx dma cfds they dont charge a minimum fee so a 5k trade only costs $5 ..i have used them for about a year with no complaints apart from they havent got futures contracts online yet but that is coming i have been told asap.

yonnie · 10 June 2007

do they do all ASX shares, even the penny stocks?

pento1999 · 12 June 2007

Hi They do 515cfds on the ASX but 1800 as shares so you can either trade cfds or shares or both but what i like is that 60% of any ASX share you trade or hold with them can be used as collateral for cfd trading

yonnie · 23 June 2007

hi pento,

Pacific Trader charges 0.075 to 0.1% commission.
when is it 0.075%?

glenn_r · 23 June 2007

My

Pacific ( Saxo) offer .075% on their market maker CFD's and .1% on their "claytons" DMA CFD's.

But if you look at their MM CFD's and add the spread ( .01) into the commish equation on a $5.00 CFD the actual commiish is really .275%.

This applies to all market maker CFD providers as they take the bid or the offer, unlike DMA CFD's you can choose to take or make the bid or offer.

So if you want to trade CFD's and pay the minimum commish, use a DMA provider, don't just look at the headline rate from a market maker.

reece55 · 23 June 2007

glenn_r said:
My

Pacific ( Saxo) offer .075% on their market maker CFD's and .1% on their "claytons" DMA CFD's.

But if you look at their MM CFD's and add the spread ( .01) into the commish equation on a $5.00 CFD the actual commiish is really .275%.

This applies to all market maker CFD providers as they take the bid or the offer, unlike DMA CFD's you can choose to take or make the bid or offer.

So if you want to trade CFD's and pay the minimum commish, use a DMA provider, don't just look at the headline rate from a market maker.

I use a MM with IG - they are right on the money with the spread, as I have a level 2 screen with Comsec and I can verify the integrity...

IMO, only trade with the leaders......... Reduces counterparty risk and minimizes potential spread distance.....

Cheers

glenn_r · 23 June 2007

Hi Reece

So you think theres no disadvantage being the price taker compared to being the price maker?

Also I agree IG are one of the more "fairer" MMers.

yonnie · 23 June 2007

glenn_r said:
My

Pacific ( Saxo) offer .075% on their market maker CFD's and .1% on their "claytons" DMA CFD's.

But if you look at their MM CFD's and add the spread ( .01) into the commish equation on a $5.00 CFD the actual commiish is really .275%.

This applies to all market maker CFD providers as they take the bid or the offer, unlike DMA CFD's you can choose to take or make the bid or offer. So if you want to trade CFD's and pay the minimum commish, use a DMA provider, don't just look at the headline rate from a market maker.

They seem to offer all the 2000+ shares trading on the ASX as well. So what is the % brokerage here and the minimum charged per trade?

thanks

monkey187 · 6 September 2007

yonnie said:
It could be CFD if you are a long-term investor.

Say you buy a CFD contract with 50% margin @ 6.5% + 3% = 9.5%

Because your account will be debited every day the interest rate is not 9.5% but more like 10.5% AND over the whole position, so you are paying 21% p.a. right there over the money you are really borrowing.

Suppose your position doubles in value over a year, which is not uncommon, you again pay interest over the value of the position and your interest rate is now 42% over the borrowed part of your position.

I am having a little trouble understanding the above... firstly if your account is debited every day its not 10.5% its still 9.5%... it only increases through the laws of compound if the interested is calculated daily yet charged monthly (or some other longer time period)... Since the interest charges are settled in cash daily and are not added to the value of the loan, this does not happen.

secondly, CFDs dont work on a margin (as you disclosed) they work on a deposit, thus you are always borrowing the full amount of your position - at an interest rate of 9.5%. I dont know how you calculated 21% - thats like saying if you buy a house on a 10% deposit you are paying 70% interest instead of 7%...

suppose your position doubles, you are still paying 9.5% on your position... if you made 100% in 1 year, with equal monthly increases, you will actually would have paid much less than 9.5% (just a guess but more like the 6-7% ish)on your total position as it is charged daily - plus you made a 100% profit - which equates to a 93-4% profit. If the interest rate was OCR + 2% - your end profit would be somewhere around the 93.5-94.5% mark.. big difference.

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Is there a fee free CFD provider?

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