Kauri
E/W Learner
- Joined
- 3 September 2005
- Posts
- 3,428
- Reactions
- 11
I was refering to the above situation- sorry didn't know they have started offering flat fees.sails said:I don't trade CFD's so can't help much there - but have looked at it to hedge option trades, and found the fees are unaceptable when compared to the flat rates I get with OX and Morrisons. For example, to just buy 5000 CBA CFD's (covering 5 options)would be approx $220,000 worth of underlying -multiply that by their percentage based fees! Margin lending with Morrisons is a much better deal where I get the $30 flat fee.
Very good point. Nor should it. I said that refering to them hedging their position- the fact is that most traders lose over the long term, so it wouldn't make sense for them to hedge all the time, unless the trader has a good track record with them, in which case they can hedge and break even on the trade and still make a profit out of brokerage and interest.Broadside said:sorry to say the house always wins does not give me confidence in a cfd provider's ability to cover its risk,
Also a good point- Was the reason I looked at trading cfd's for awhile! It was only after I read through the PDS for some of these companies that I decided not to go ahead. I found it to be fairly disturbing reading, and would recommend to any aspiring cfd trader to go through the provider's PDS thoroughly before they begin.Broadside said:granted there are other ways to get the same exposure using options etc but not all stocks offered for cfd are ETOs, cheers professor.
robots said:hello,
how do CFD providers hedge a traders position?
for example, if I short TLS , what do they do?
look forward to a response
thankyou
robots
professor_frink said:Don't know for sure, but one way they could do it is take the same position in the underlying share. For example if you are long a stock, they could also buy the underlying- if you make 3%, so do they, giving them a neutral result on the trade, with a profit after they charge brokerage and interest. Short- I'm not so sure on as it's not exactly a common thing on the ASX.
Don't know any of this for sure but so don't quote me on it!
YOUNG_TRADER said:I really like IG markets,
Very low margins on resource stocks I like, much better tahn Macquarie and the allow GSL (with slight premiums)
I like!
How have people found IG Markets, especailly their L2 DMA System?
Have you considered that they might be hedging in the futures markets and/or the ETO markets (both stock and index options), or alternatively you may not see all the order transactions in the CFD itself? Don’t forget they cover a range of markets.Broadside said:yes I understand they could hedge this way but I have never seen depth in SEATS change as a result of my trades so it makes me wonder
rookie, the interest you calculated is incorrect. Although unlikely, let's just assume the NAB sp stays at $36 and the total size of the open position is $1,600. The interest per day would equal $0.35.rookie said:Let's say, the average holding period of a long position is about 5-10 days.
The overnight rate that the CFD provider charges is 8% (Current RBA rate=6% + 2)
Interest on a long NAB position:
$1600 / $36 = 44 share CFDs
(8%/360 = 0.02222) * $36 * 44 = $3.51 / night
$3.51 * 5 days holding = $17.5
$80 - $17.5 = $62.5 to invest ...
-----
3. WHAT ARE THE TAXATION REGULATIONS ON CFD TRADING?
My wife doesn't have any taxable income as she's staying at home with the kids. Should I open the account under her name to get the tax advantages or this sort of income is taxed on the highest rate?
-----
I'm pretty sure they even have in-house traders to move the prices by only 1-2 ticks to get most of the positions with tight stop loss limits out.
robots said:hello,
how do CFD providers hedge a traders position?
for example, if I short TLS , what do they do?
look forward to a response
thankyou
robots
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?