Which CFD provider is best?

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klauster

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Post Number: 1
Registered: 04-2005

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Tuesday, April 12, 2005 - 02:37 pm:

Hi there,

I've just joined and wanted to know what the latest opinion is on which CFD Provider is best for swing trading.

My apologise if this message has already been send to this Forum somewhere but I have not been able to find it so I figured that I must have done something wrong when uploading it.

I've read all the threads in this forum and they were very informative.

I'm now considering IG Markets for their guaranteed stop loss which is a must for me and Man Financials because their are in based in Sydney.

I would appreciated if anybody can give me some feedback on their experience on their buy/sell spreads, commission, trading platforms etc. for the above mentioned providers or indeed any other provider.

Thanks again and trade well!

Gottagonow,

Ralph

oby_2

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Thursday, April 21, 2005 - 01:10 pm:

Klauster,

I'm in a similar situation and while I like the structure of IG Markets, have heard good things about CMC as well. My main concerns thus far are that CMC CFDs are only based on the underlying price and not identical to it, and the cost of IG Markets trades.

MOST disappointing though has been the unprofessional way in which the sales men from IG Markets and CMC attack each other and claim lies and deceit on each other behalves. I'm hoping someone can provide some feedback and have sent a quick question to one forum user in an effort for a straight answer.

Let us know how your decision goes.

Cheers, oby

may

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Monday, April 25, 2005 - 07:28 am:

Hi Klauster

I use CMC for my (ASX)CFD trading and have found their service quite adequate and staff helpful. My 'live order' trades have always been executed at the market price providing there is sufficient volume to cover the order (the indices are always a few tics different).

One of the biggest drawbacks in my view is the inability to set entry orders out of market hours. To take a position you have to do it 'live'. Exit orders can be placed 'live' or between 6am and 10pm (I think those are the times). If a stock gaps down at the open and you have a stop order in the queue it will be filled at the open price and not where you set it, so be very aware of ex-div dates, etc.

CMC offer ASX200 stocks. I believe IG offer ASX300. I also believe their commission charge is higher and spread for stop orders is greater, however, you would need to check this out as it is quite sometime since I was given that information and it may well have changed with the increased competition for this type of business.

Hope this is of some help.

Have a happy day.

klauster

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Wednesday, April 27, 2005 - 01:57 pm:

Oby 2 & May,

Thanks for the feedback!

My apologise for the late reply, as I've been competing in a fishing competition called the Trans Tasman Championchips and the Nationals.

I too noticed that some of the "Salespersons" are very eager to put down their competitors.

I'm just about made up my mind and have opened an account with IG Markets, guaranteed stop loss was the main reason for doing so. The guaranteed stop loss are only available for the ASX200

By the way Man Financials covers almost 500 stocks but one must wonder about liquidity and offering and accepting a trade can be a different story.

Thanks again,

Ralph

oby_2

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Monday, May 02, 2005 - 04:58 pm:

Klauster,

Thanks for the reply. I am checking out a CMC "seminar" this Wednesday and have many questions to clear up before making a final decision. For me it is between CMC and IG Markets, with price versus Guaranteed Stop Losses my main decision factors.

I will post any feedback from the seminar then in case any other newbies are keen for info.

PS - thanks go to Shawky for ensuring I have sufficient ammunition come question & answer time!

happy trading

oby 2

klauster

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Tuesday, May 03, 2005 - 09:33 am:

Oby 2

That would be great because the more info we have the better it is to make a informed decision.

I may be able to make it to that seminar too but I have had some unexpected commitments (funeral) and seeing that the seminar starts a 6.00pm I could be a 50/50 chance.

Trade well and HAGD!
Ralph

oby_2

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Thursday, May 05, 2005 - 02:13 pm:

Some relevant info on the service provided by CMC for any interested:

CFDs

They trade CFD's on the top 239 stock at a 0.1% commission or $10 whichever is higher, and no commission on Foreign Exchange, Indices, Sectors or Commodities (commission made on spread instead).

Guaranteed stops

1) Must be placed by phone and can only be done so between 9:30am and 3:00pm, 30 minutes after placing you buy/sell order. They can not be changed, only cancelled and a new one placed

2) They must also be cancelled by phone

3) There fee is charged in a complicated manner, based on the underlying price of the share and is charged at the time of placing the GSLO:
-0 to 99.5c add 1 cent per share
-$1 to $4.99 add 2 cents per share
-$5 to $9.99 add 3 cents per share
- etc
- etc, up to
- add 10c per share

Stop Losses

There stop losses will be activated whether a gap has placed you out of the trade or not. Therefore if your stop was at 50c and the price gapped straight to 47c, they will get you out of the position at Market Price, rather than place a limit order at 50c

Filling Orders

They will fill your order if it is close enough to what is in the underlying market (that is not over by 1000's), however if over they requote. Therefore you need to watch market depth before placing a trade to ensure you get the best price.

All in all it was a pretty decent presentation that passed on a good amount of information with not toooo much of a hard sell. Still a little "others BAD, we GOOD" mentality that seems to prevail in the CFD market at the moment, but we are all capable of overlooking these things I'm sure.

Pretty much everything else is available on their website, but this is the info that is a little harder to find. Please let me know if any other newbies are looking for CFD info as I am only too happy to pass on my thoughts.

Happy Hunting Incredible Chartists....

oby

fibonacci

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Registered: 10-2003

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Thursday, May 05, 2005 - 06:32 pm:

Good evening oby 2
Perhaps no CFD provider is "The Best".
Each of us will decide which one suits our trading requirements better. The differences are [as always] in the fine print.
Re the CMC presentation you attended....
Was their exact mechanism for requoting explained?
If so could you please enlighten me, as well as the name of
the rep who gave that information.
Thanks
John

oby_2

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Friday, May 06, 2005 - 09:51 am:

John,

I whole heartedly agree with the no "best" provider comment, as I believe each person's requirements will lead them to weight various offerings differently. My hope was simply to provide a little of the less obvious information to anyone that is interested. I myself have not yet made a final decision.

With regards to the requote, I spoke to a couple of people with the clearest explanation coming from Ross (a young English guy who did the software presentation). In a one on one discussion he explained the following:

Normal Quote
1) You place your order in Market Maker
2) This then comes up on the screen of one of their traders who considers your trade in light of the current market depth
3) If there is sufficient volume available they accept
4) You get a green screen and your order is accepted

Requote
1) You place your order in Market Maker
2) This then comes up on the screen of one of their traders who considers your trade in light of the current market depth
3) If you've requested significantly more than what is available at that price or if they receive several requests at the same time outstripping supply, they requote based on a price where sufficient supply is available
4) You receive a new screen with a requote which you then accept or decline

The issue here is obviously that the requote facility leaves some area for "creative fulfillment" on the side of CMC, however as this should be directly reflected in the market depth, it should be relatively transparent.

Hope this answers your question.

Cheers,
oby

mandrake

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Friday, May 06, 2005 - 12:56 pm:

Oby 2,
It's worth noting, however, that the re-quote is available for only five seconds. There's about a second for the image to appear and the countdown only seems to register at about two/three seconds. If you don't respond instantly, your order is cancelled. Or maybe my reflexes just aren't what they used to be!
It is now a given for me to check market depth before any order. This applies particularly to Stop Loss orders...

'The method of the enterprising is to plan with audacity, and execute with vigor;to sketch out a map of possibilities; and then to treat them as probabilities'. Bovee

fibonacci

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Saturday, May 07, 2005 - 11:45 am:

oby
Thanks for your info. I use CMC so now I'll get to the "nitty gritty" of requoting.

Quote from Brian Griffin, Head of CMC's CFD dealing desk [in 'Your Trading Edge', Jan/Feb 05] "....clients can get a volume weighted average quote for the number of shares they wish to trade...... a market maker would quote you the average price."

This IS an area that I'm not getting clarification on from CMC. Every time I've been requoted the requote is at the worst price for the number I'm attempting to trade e.g. wanting to buy 1000 at $9.50 with a market depth of 970@
$9.50 and 3000@$9.55 I'm always requoted at $9.55, to my chagrin. I will be pursuing this issue further up the ladder next week but perhaps someone can enlighten/give me ammo in the meantime.
I feel that once you've chosen your CFD provider it's crucial that you understand their rules/MO. Every time you don't it costs.

Having said that I'm reasonably happy with CMC, particularly they are willing to spend time helping their clients.

Also to may...
Customers can set all orders for all markets out of trading hours except ASX CFDs stop entry orders i.e. LIMIT orders can be used to enter out of hours orders.

John

oby_2

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Sunday, May 08, 2005 - 11:11 am:

John,

As far as those I have spoken to regarding filling orders, I received similar information to the above from Anna Radford and Ewan McGinsky, but it was the young English guy who did the demonstration (Ross I believe) who said that should your order be close to Market Depth (such as your example of 1000 Vs 970) they would approve it anyway. It would seem from your experience that this isn't the case.

I certainly did not hear the "volume weighted average" comment though, as that would be my preference.

Thanks for the added info as well Mandrake.

oby