Aussie200 CFDs - Comparison

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pasminco

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Post Number: 18
Registered: 02-2005

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Tuesday, December 20, 2005 - 12:16 pm:

There's a long thread about CFD providers here, but very little is said about how they compare for trading the SPI200 CFDs.

What I believe so far is that CMC have a two-point spread most of the time, and no commissions. However they charge 1.8% commission on the initial minimum $5000 deposit. That sucks.

Are any of you trading SPI200 CFDs? Which broker do you use and why? Thanks a many.

(Message edited by pasminco on December 20, 2005)

perler59

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Post Number: 787
Registered: 09-2003

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Tuesday, December 20, 2005 - 10:31 pm:

I use IG Markets for the occasional SPI200 CFD because I have an account with them. They have a 3 point spread and no other charges for day trading. Overnight they charge/pay interest and pay/charge dividends.

They have the usual $20 per pint contract and also a $5 per point contract which is great for practicing with real money and reduced stress :-)

http://sttc.net.au/~stever

pasminco

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Post Number: 19
Registered: 02-2005

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Wednesday, December 21, 2005 - 01:03 pm:

Thanks Perler, CMC seems to be a better deal, they have a two-point spread without commissions or monthly fees (for index traders, not share CFD traders). It's possible to trade for as little as $1 per tick, and for as much as your margin will allow ($1000 lets you trade about 20 lots at a time for $20 per tick). I've looked into a few others as well such as Etrade and Macquaire, but so far CMC seems to win the race.

I've been trading the S.P.I. on SFE for an embarrassingly long period of time and I'm still losing consistently. I've finally figured out what my problem is :

I haven't accepted the risk of trading!

What that means is that I have a great deal of trouble pulling the trigger, as a consequence I fail to take advantage of the inherent advantage of my trading method. I end up taking "the easy trades" and not the less-obvious ones. Needless to say it's the less-obvious ones that are the big winners moving 20 points in half an hour.

Having a CFD account will allow me to take EVERY trade that my method stipulates without turning to jelly under pressure and letting it go (ie not taking the trade) simply because there will be less to lose, as little as $1 per tick if i choose.

So that is why I am asking about Index CFDs. Thanks for your help!

ingot54

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Post Number: 1001
Registered: 05-2004

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Wednesday, December 21, 2005 - 03:03 pm:

IGMarkets do offer trading on 10 of the 12 sectors of the ASX, as well as the ASX200 index.

They do not reveal the spread, on the section of the site I visited, and you would need to call them to activate the sector trading platform, I imagine.

SECTORS :

We offer Sectors from Australia and the UK and our prices are based on the actual market price of the underlying constituent stocks. We charge no commission on Sectors; all you pay is the dealing spread.

Australian Sectors
We offer standard and mini contracts on the following sectors:

Consumer Discretionary
Energy
Financials
Health Care
Information Technology
Materials
Industrial
Consumer Staples
Telecoms
Utilities

New accounts
Australia Freecall 1800 601 799
N.Z. Freecall 0800 442 150
or +61 (3) 9860 1799

Helpdesk/support
Freecall 1800 601 734
or +61 (3) 9860 1734

Dealing Desk +61 (3) 9860 1733
Switchboard +61 (3) 9860 1711
Fax +61 (3) 9860 1755
helpdesk@igmarkets.com.au

IG Markets Ltd
Level 3
499 St Kilda Road
Melbourne VIC 3004

Having said that, I have no experience other than trading equity CFD's on the GSLO (Limited Risk) Platform.

Keep Smiling

Trading style :Short Term and CFD's predominantly

ingot54

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Post Number: 1002
Registered: 05-2004

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Wednesday, December 21, 2005 - 03:10 pm:

Just a further note on IGM's Index CFD's : This might explain why some positions are closed out, on spike downs, even though the actual market did not reach the level upon which the close-out price occurred.

6) Limited Risk positions on stock indices are closed if the middle of our quotation reaches the selected stop level. There may be nothing against which to measure our quotation, particularly at times when the underlying market is closed.

Our quotations, especially at such times, reflect our own view of the prospects for a market. Furthermore, business done by other clients may itself affect our quotations. If a price reaches one client's Limited Risk stop level, so that, for example, he sells to close a position, that sale may itself push our quotation down to a level at which another client's Limited Risk position has to be closed.

Sobering thought, if holding positions open overnight.

Keep Smiling

Trading style :Short Term and CFD's predominantly

perler59

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Post Number: 788
Registered: 09-2003

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Wednesday, December 21, 2005 - 08:35 pm:

Hi Ingot. Its for reasons like that, that I don't use stops overnight. I wait till the futures and Index converge the next day before trying to get out. Quick overnight spikes can give good entries if you are awake and watching at the time (and feeling brave) :-)

http://sttc.net.au/~stever

hilarius

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Post Number: 1417
Registered: 04-2004

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Thursday, December 22, 2005 - 03:25 am:

Hi Ingot

This situation seems to me to be ripe for manipulation even if the CFD provider is scrupulously honest

In effect each CFD provider is establishing a mini (or not so mini) market based on the perceptions of the participants when the main markets are closed, if I understand you correctly?

Such a collection of non-market "markets" could be visited by one or more individuals bent on mischief, or even failing that can provide a cascade of honestly executed stops

Imagine what would happen in a really volatile market panic up or down while markets were closed

Even without malice by participants all sorts of transactions could be going on in these fragmented "non-market" markets, beyond the control of the market provider

Still worse imagine if a rogue dealer were to get a foothold in a CFD provider's office who remained undetected for a while. Even banks with large reputations to protect are not immune from this.

We are really in unexplored unregulated territory with markets that are not tied to real markets in individual provider offices

With the best will in the world can the providers give assurances of fairness, when their fine print allows for "non-market" events?

In times of major market moves and even in quiet times it seems that the smaller fish in the market could be well and truly burnt or fried to a crisp

Or am I being unduly alarmist?

I stress that this is not a question about the ethics of a particular provider per se, although that ultimately is an important issue. It is in the short term a question about the strength of participants with deeper pockets than yours or mine, and the dice being loaded against us humble folk

It also raises questions about who has access to provider markets behind the scenes in ways which we are not told about? When disconnection from main markets is allowed it seems that almost anything could be possible.

With Best Wishes

Hilarius

I come in peace to share my thoughts and to shine my candle light on possible long term opportunities

ingot54

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Post Number: 1003
Registered: 05-2004

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Thursday, December 22, 2005 - 07:47 am:

Good morning Hilarius.

You raise a very important point - There may be nothing against which to measure our quotation, particularly at times when the underlying market is closed.

Why indeed do they make quotations after the market closes to the general trader?

Who is the "General Trader"?

What is the "other" kind of trader, who has access to move the markets, when "General Traders" do not?

I think this is what you are saying: It also raises questions about who has access to provider markets behind the scenes in ways which we are not told about? When disconnection from main markets is allowed it seems that almost anything could be possible.

Furthermore, business done by other clients may itself affect our quotations.

This intrigues me. If "other clients" are trading, why not those who are NOT "other clients"? Who IS trading?

I think it comes down to something like remaining in a trade overnight, and finding a large gap up/down on the open.

The mechanics is different, because the gaps are a result of orders placed after close/before open. But being stopped out during "overnight trading" when there is no opportunity to participate, is leaving too much of the underbelly exposed to the universe!

I remember CMC had some traders stopped out on an index trade overnight, if I have my facts aligned. I believe they DID reverse the trades on that occasion, to their credit, but it sounds like the same mechanism at work. That is, it was probably NOT the doing of CMC, but "other" participants trading behind the scenes.

I think IGM have included these two paragraphs in their contract details, to cover themselves for such events.

Moral: Don't stay in these trades out of hours.

Keep Smiling

Trading style :Short Term and CFD's predominantly

perler59

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Post Number: 789
Registered: 09-2003

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Votes: 0


Thursday, December 22, 2005 - 02:15 pm:

IG Sector spreads from live quotes today:

Consumer Discretionary: 2217.8 2226.6 ~ 0.4%
Consumer Staple: 5879.2 5902.8
Energy: 11029.2 11073.4
Financials: 5539.1 5561.3
Health: 6299.1 6324.3
Industrial: 5349.4 5370.8
IT: 433.3 435.1
Materials: 9076.3 9112.7
Telecoms: 1442.4 1448.2
Utilities: 5629.1 5651.7

http://sttc.net.au/~stever

ingot54

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Post Number: 1011
Registered: 05-2004

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Thursday, December 22, 2005 - 03:58 pm:

Perler, if your figures are telling me what I think they are, the attractiveness of sector trading lessens.

I have not logged in to IGM today, but I may call them tomorrow, or email them for some clarification of the new facility.

Effectively, one has to overcome the spread before providing for the groceries!

Consumer Discretionary:. 2217.8 2226.6 = 8.8 points
Consumer Staple: ..........5879.2 5902.8 = 23.6 points
Energy: ....................11029.2 11073.4 = 44.2 points
Financials: ....................5539.1 5561.3 = 22.2 points
Health: ........................6299.1 6324.3 = 25.2 points
Industrial: ....................5349.4 5370.8 = 21.4 points
IT: ...............................433.3 435.10 = 1.8 points
Materials: .....................9076.3 9112.7 = 36.4 points
Telecoms: ....................1442.4 1448.2 = 5.8 points
Utilities: .......................5629.1 5651.7 = 22.6 points

Have I interpreted your information correctly?

Index trading with IGM at 2 to 3 points spread, depending on in-hours, or out-of-hours trading, would be better?

Pasminco - I apologise for diverting the intent of your thread. Do you wish us to continue, or move to another thread. I would like to expand the discussion on sector trading in time.

Keep Smiling

Trading style :Short Term and CFD's predominantly

perler59

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Post Number: 790
Registered: 09-2003

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Thursday, December 22, 2005 - 07:59 pm:

Ingot. Indeed you have. The spread is 0.4% on the three I've bothered to punch into the calculator, whereas the SPI200 CFD is at the moment 3/4708 * 100 = 0.064%, so the sector spread is 6.25 times as wide!

I think the sectors are based on actual share prices rather than a (nasty, volatile) futures contract, so that may help with the stops.

The overnight interest on the energy sector would be large, I think, because of the big numbers involved.

http://sttc.net.au/~stever

pasminco

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Post Number: 20
Registered: 02-2005

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Friday, December 23, 2005 - 12:20 am:

Perler, I've already decided to use CMC as they have a constant 2-point spread. Until a better deal comes along I'm staying with CMC.

Therefore this thread has already served it's purpose as far as I'm concerned and you may take it in any direction you like. Go for it.

jlacco

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Post Number: 31
Registered: 07-2005

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Sunday, January 08, 2006 - 04:04 pm:

Trade the SPI, Its a 1 point spread and its what the AUSSIE 200 (with cmc) tracks exactly (according to Dean) during the day.