Kauri your above post was an eye opener, most interesting !Kauri said:That is why I stopped trading, studied what I was doing, and started using GSL's.
Say I had $100000 for a bank and wanted to go unprotected via CFD's in BHP, then by risking no more than 15% (or $15000) on a complete wipeout scenario then the amount I purchase would be 15000/26.5=566 shares.
a) Via CFD= 5% margin + (5% margin*10% for divi allowance)=$825 with $14175 put away in case of disaster = $15000. Total risk = $15000....
b) Via normal purchase of shares = $15000. Total risk = $15000....
c) Via CFD DMA GSL = 5% margin + (5% margin*10% for divi allowance) + 0.3% GSL premium = 750 + 75 + 45 =$870. Total risk = $870.
Should also mention that under my trading guidelines (another contentious issue on another thread) that no one position (total share value) will represent more than 15% of my bank and my total use of funds available (margin etc) will not represent more than 30% of my available funds.
Now why would I use a or b over c, in fact why would I bother with leveraged a as opposed to b, apart from a small interest gain? In a and b I could have approx 7 open BHP type positions with all my $100000 committed and ultimately all at risk whereas with c I can comfortably have 15 BHP type positions open with less than 15% of my funds committed and at risk. If I am going to use leverage I want to know my total liability under a worst case scenario and I want to be in control of my risk, not at the mercy of external factors ( and unexpected earnings downgrades).
Kauri said:Apart from market crashes, what would happen if (God forbid) you had a stroke, car accident..... and were comatose, would anyone manage your account for you?? (Sorry about the gloom, bad night.. )
Uncle Festivus said:I'm already into short index cfd's, the IG Markets Mini 200. Looks like an income generator now with short interest plus capital gains. I wonder what happens to the cfd providers in the event of a big market correction. I wouldn't mind betting they will put restrictions on short selling or bump up the margins.
no spike on the futures.wahoo said:Hey - heres last nights 2min tick chart of 'mini wall st cash' from IG markets - between the two red lines was the trading day
Now maybeez I'm jus paranoid - but 15 mins after close there's an inexplicable 200 point spike 15mins after close - does anyone have a chart from another source that verifies this spike - cos it sure looks like a 'shake out the shorts' for absolutely no reason (unless ur the provider....)
yep, gotta love em, don't you! Surprised they didn't spike it up above the high of the day to get rid of more of the shorts(it's a fairly common area for stops to be placed).wahoo said:Hey frinky
So basically IG charts made a 400point movement in 4mins of trading with no external forces coming to bear on their index
nice trade if u can catch it
sure looks suss.........
I don't trade CFD's wahoo, that chart you posted is one reason why. I trade futures through Interactive Brokers.wahoo said:cheers frinkster - thats the chart I tried to access first of all!
So who do you trade with frinky - after seeing this its gonna blow out my risk factor to push my stoploss out far enuff to protect me from my provider
The mechanics of trading the futures contract compared to trading the cfd equivalent won't be much of a change- Apart from the spike on your chart, it looks to be quite close to the futures contract, provided they don't do that in the middle of the session, you could probably still daytrade it via cfd's fairly well( depending on the spread of course!).wahoo said:hmmmmm
futures hey
uhoh........... think I'm in for another learning curve - pretty mus the same as trading the index tho - but there mus be a few curly diferences eh?
nice site looks like a pretty solid platform - you had good experiences wid them - any dramas to an fro with money in an out of account - you bank it all overseas so there's no tax..............
Frinklet, I think you and IG may have converted me
No worries mate, good luck with whatever you decide to do. In the meantime, keep those stops nice and widewahoo said:Hey Frinkwardo thanks fo that - I'll have a good look it
Uncle Festivus said:I'm already into short index cfd's, the IG Markets Mini 200. Looks like an income generator now with short interest plus capital gains. I wonder what happens to the cfd providers in the event of a big market correction. I wouldn't mind betting they will put restrictions on short selling or bump up the margins.
DM access. I like to see my actual order placed on the market as a real order. GSL's are expensive though if trading tight stops.nizar said:To those trading CFDs.
Do you do it from a real market or from a market maker like CMC?
I heard with market makers its better to place stops outside the market??
nizar said:To those trading CFDs.
Do you do it from a real market or from a market maker like CMC?
I heard with market makers its better to place stops outside the market??
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