Archive through February 01, 2006
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     tricky
Member
Username: tricky
Post Number: 12
Registered: 10-2003Rating: N/A
Votes: 0
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| | Friday, September 16, 2005 - 11:33 pm: | 
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Ingot54,
I would be slightly peeved if they would not take my trade, what is a full book??? don't they hedge on the underlying market? what would be the situation if you were trying to exit a trade at a profit and they hadn't hedged your trade, would they refuse to offer you a price to get out?
It all sounds a bit one sided for me. Maybe i have missed something or got the wrong end of your example. I thought they offered Direct market access? therefore they would always hedge by buying the underlying security and their profit is the 0.2% brokerage + the % of finance.
cheers,
Tricky
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ingot54
Member
Username: ingot54
Post Number: 830
Registered: 05-2004Rating: N/A
Votes: 0
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| | Saturday, September 17, 2005 - 05:23 pm: |
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You make a valid point, Tricky. I am a bit accommodating by nature, and usually take it as a reason not to push the boundaries, but to move on with another trade.
But you are right - if they cover by buying/selling into the underlying, it should be no skin off their noses.
Perhaps they should be confronted about whether they are only bookmakers after all.
Watch this space ... the truth will appear! 
Keep Smiling
Trading style :Short Term and CFD's predominantly
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davkell
Member
Username: davkell
Post Number: 236
Registered: 07-2004Rating: N/A
Votes: 0
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| | Saturday, September 17, 2005 - 08:12 pm: |
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Thanks Ingot for the IG markets info. I've looked at them, but saw the $5000 deposit pretty early and that rules me straight out so never looked any further.
I'm still leaning towards trying Marketech. Might close positions at the end of the month and swap over. $10 commission each way, and no ASX data fee is just too much of a positive for such a small trading account.
CMC's $38.50month ASX fee equates to a need for a 30.8% return per year just to cover it, ouch!!!
"Trade Your Way To Financial Freedom" - Van K Tharp
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andrewk
Member
Username: andrewk
Post Number: 227
Registered: 09-2003Rating: N/A
Votes: 0
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| | Saturday, September 17, 2005 - 08:30 pm: |
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Macquarie claim they are the only true direct market access (ie they actually buy the underlying when you enter the cfd trade) CFD providers who also provide a guaranteed stop loss feature. So?
Another option is to have active accounts with several cfd providers - that may give you a wider range of shares/instruments to trade (with potentially varying fees also).
One (hidden and slightly shonky) way to take advantage of the market maker approach vs the direct market access approach (where the underlying is purchased) is you can take advantage of extra artificial liquidity. Ie, if there are 20000 shares available on the offer, then you could accept those 20000 cfds at that price, first with the market maker provider (which will not purchase the underlying. Those underlying shares on offer will still be there seconds later when you enter the same trade with the DMA provider, thus netting you twice the liquidity than what was available on the underlying.
It is a slightly shonky approach, but it shows a potential flaw in the market maker system anyhow.
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ingot54
Member
Username: ingot54
Post Number: 832
Registered: 05-2004Rating: N/A
Votes: 0
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| | Saturday, September 17, 2005 - 08:36 pm: |
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Thanks Davkell.
Can you tell me a bit more about the costs with Marketech please.
The $10 each way commission sounds good, but do they cover by increasing spread? Any other charges?
Most important for me is the ability to continuously move the GSLO. With IGM you pay 0.3% up front on the L1 a/c (guaranteed stops a/c) but that's it. After that you can move that stop from their platform as many times per day or week, without further charge.
IGM pay the market access fee too - saves the $38.50/month.
What do you have?
Keep Smiling
Trading style :Short Term and CFD's predominantly
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davkell
Member
Username: davkell
Post Number: 238
Registered: 07-2004Rating: N/A
Votes: 0
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| | Saturday, September 17, 2005 - 10:03 pm: |
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From above Ingot:
There's a new CFD provider (how new I don't know) that hasn't been listed or spoken about yet, accept for a question about it above.
It is: Marketech.
They are a Perth based company offering CFD's on the over 200 ASX stocks and increasing. It is Direct Market Access, you see your order on SEATS as soon as you place your CFD trade.
Costs: 0.1% added to the stock price spread. There is an additional $10 fee for trades less than $10,000 in value.
There is no monthly fee to trade CFD's with Marketech unless you utilise there charting package which is additional and $45 per month data, but us IC user's know better!
You can download their trading software easily as a DEMO.
I'm looking further into it, because it sounds very good compared to my current CMC account, especially taking into account CMC's monthly ASX fee (mandatory!).
Anyone got any experience with Marketech?
http://www.marketech.com.au/
The $10 commission each way is only for trades less than $10,000 in value, otherwise it's just the 0.1% added to the ASX spread.
I don't believe they offer GSLO's yet, just normal stops! But it's in the pipeline. Account can be opened for a $1000minimum too.
Cheers.
"Trade Your Way To Financial Freedom" - Van K Tharp
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histrionix
Member
Username: histrionix
Post Number: 20
Registered: 08-2005Rating: N/A
Votes: 0
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| | Wednesday, September 21, 2005 - 08:42 pm: |
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I have pasted below an extract from Marketech's PDS which would seem to indicate that they are Market Makers rather than providing Direct Market Access (unless there is some nicety that I haven't appreciated)
"In this regard, Marketech is a market maker, not a broker, and accordingly will act as a principal, not as an agent, in
respect of all transactions with you. In other words, Marketech will be the counterparty to the transaction and each product purchased (or sold) by you is an individual agreement made between you and Marketech.
Accordingly, should you decide to deal (transact), then Marketech will endeavor to make you a price (or market). Once you confirm all of the relevant details, the deal is done.
It is important to note that although Marketech will endeavor to make you the best price possible in accordance with the commission structures outlined in this PDS, it has full discretion to adjust these prices. Marketech also HIGHLY RECOMMENDS clients to read the section on trading CFD’s under the Help dropdown menu of the trading platform to ensure you understand what various messages within the trading platform mean. For example, a purple price window
means there is currently no price being offered by Marketech. Clients should also understand that the price window is indicative only and does not mean that Marketech is ‘firm’ (will definitely trade) at that price."
Also, the comment about purple price windows brought to mind the comment above from Ingot about IG sometimes not offering a price or having "a full book"!
There is a tide in the affairs of men which, taken at the flood, leads on to fortune.
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ingot54
Member
Username: ingot54
Post Number: 858
Registered: 05-2004Rating: N/A
Votes: 0
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| | Wednesday, September 21, 2005 - 10:05 pm: |
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Thanks for the above, Davkell and Histrionix.
Over the past 3 days, I have spoken to IGMarkets each day!
On each occasion, I have had my questions answered to my satisfaction, although yesterday I was quite irate with them!
They have SMY, ENE, GHG, SGX, and MAP, to mention a few, listed as available for transactions via my "Limited Risk" a/c.
Co-incidentally, I attempted to open small positions on these, as part of my short list - an experiment.
It transpires that although I am getting the exact market price (paying normal bid/offer prices), my shares are not bought directly into the market.
In short, IGM is a bookmaker, or if you prefer the euphemism, a market-maker. Yes, they do hedge the book into the underlying if getting a bit top-heavy, but even they have their limits. They also may buy the index, or put options if applicable.
It's like trying to get on the favourite in a horse race! If nothing else is backed, the bookmaker shortens the price to unbackable odds. In the case of the market-makers, they either limit the action, or increase the fees... which brings me to my next point.
IGM have increased their GSLO fees, but reduced their commission. For stocks in the ASX50 - ASX100, the fee is 0.3%. For ASX100 - ASX200, the fee is 0.7%, and for anything over ASX200 to Asx300, the fee (wait for it) is 1%.
IGM, on each day I was talking to them - three different consultants - reminded me that I could purchase the stocks on other than a Controlled Risk a/c - (DMA a/c). It seems they would love us all to ditch the GSLO a/c, but I told them if I don't have a GSLO, I don't trade.
Seems we have to really nut out the figures, and work out if the fees and charges are better with one provider or another. For now, I stay with IGM, but while I may be dating them, I'm still looking around with bachelor's eyes!! 
Another trick is to choose your stocks astutely - stay with better-performing stocks, reducing the need for frequent turnover.
Keep Smiling
Trading style :Short Term and CFD's predominantly
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ingot54
Member
Username: ingot54
Post Number: 859
Registered: 05-2004Rating: N/A
Votes: 0
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| | Wednesday, September 21, 2005 - 10:16 pm: |
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I should mention that these stocks, SMY, ENE, GHG, SGX, and MAP although listed as available, were not.
The book was "full".
Keep Smiling
Trading style :Short Term and CFD's predominantly
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davkell
Member
Username: davkell
Post Number: 239
Registered: 07-2004Rating: N/A
Votes: 0
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| | Thursday, September 22, 2005 - 01:01 am: |
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Histrionix;
I guess it pretty much means (a) make sure you understand your trading platform, (b) make sure your trade details are correct before hitting the TRADE button and (c) if the broker/market maker etc isn't providing you with the price you want, then don't accept it.
Essentially we all need to weigh up the pros & cons of each provider and make a decision based on one's own personal circumstances. Me: $38.50monthly is just too much for my little account, and I don't trade 5 times a month on average anyway.
Good comparing the various providers though.
"Trade Your Way To Financial Freedom" - Van K Tharp
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davkell
Member
Username: davkell
Post Number: 240
Registered: 07-2004Rating: N/A
Votes: 0
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| | Friday, September 23, 2005 - 01:11 pm: |
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Histrionix and all others seeking answers about Marketech. I had a good chat with Andrew from Marketech today, and have answers for some of our concerns:
1. A comment from Thommo on another CFD thread stated that October's Shares mag stated Marketech was an "optional direct market access provider". Marketech offer a FULL DMA service on 310 stocks but at a monthly fee. However, they actually recommend to their clients not to use this as the FREE DMA model offers full DMA to 290 stocks. The only difference is in some of the stocks with extremely high liquidity on the ASX such as TLS and BHP. You will still get the ASX quoted price for such stocks but the trade isn't matched on the ASX.
2. In regards to Histrionix's questions regarding Marketech's PDS and the purple window! Andrew is checking the PDS, as this is either wrong or has been misinterpreted. The purple window is only an indication that no trades have occurred for sometime on the ASX market. All quotes provided by marketech are based on the ASX quote spread plus the 0.1% (see next question). Marketech do not have a FULL book policy, they will accept all trade requests on all OPEN stocks on the ASX within the 310 available stocks.
3. Quotes provided are to 3 decimals points, rounded to the 3rd decimal.
4. GLSO's. Were available, but Marketech stopped offering them as they considered them to be "uneconomical". However, due to significant demand, they are planning to reintroduce them. But this is not expected till June 2006 and costs and technicalities of instigating them are not known at this stage.
5. Buy/Sell Stop Entries are available. I.e. If XYZ is trading at 4.50/4.52 and you want to buy it when it trades above 4.60, you can place a Buy Stop Entry order at 4.60 which will be activated when the SELL spread hits that level. These orders can all have conditional orders linked with it, so if your Buy Stop Entry is activated, your STOP loss order is automatically implemented, as well as STOP PROFIT orders etc. The reverse is true for SHORTing the market.
I hope that answers some of your questions, I know it does for me.
Cheers.
"Trade Your Way To Financial Freedom" - Van K Tharp
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histrionix
Member
Username: histrionix
Post Number: 21
Registered: 08-2005Rating: N/A
Votes: 0
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| | Friday, September 23, 2005 - 07:42 pm: |
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Okay . . . Its Friday evening, I'm just in from work. The end of a working week; the brain feels like a piece of three day old chewing gum, but I have a stubbie or two of Carlton Cold in the fridge, I've emptied a packet of Nobbies Beer Nuts into a bowl and I've put on some good music; the weekend and the AFL Grand Final lay ahead of me. God is in his heaven and all is well with the world (well within the confines of chez Histrionix anyway!).
Then I check the e-mail to discover that Davkell has been sloshing light into the darker corners of Marketech! Now while the jaws work away at Nobbies nuts, my brain has something to chew over as well!
No, its no good! Three day old chewing gum should either be stuck on the bedhead or turfed! Can someone with a fresh stick of Wrigleys explain this to me? I had always understood that CFD providers came in two flavours: DMA or Market Makers but, as I said in my earlier post, there may well be a nicety here that has escaped me.
MAN Financial explain the difference between MM & DMA in a manner that I thought was clear enough, but now Andrew from Marketech is telling us (Davkell) that they provide a DMA service while their PDS is quite emphatic that they are Market Makers.
As for purple windows (as opposed to Purple Haze - more descriptive of my mind perhaps!) I can only paste in the words that appear in their PDS:
"It is important to note that although Marketech will endeavor to make you the best price possible in accordance with the commission structures outlined in this PDS, it has full discretion to adjust these prices. Marketech also HIGHLY RECOMMENDS clients to read the section on trading CFD’s under the Help dropdown menu of the trading platform to ensure you understand what various messages within the trading platform mean. For example, a purple price window
means there is currently no price being offered by Marketech. Clients should also understand that the price window is indicative only and does not mean that Marketech is ‘firm’ (will definitely trade) at that price." (PDS Part 1 Clause 8 - final para.)
Have I misunderstood?
There is a tide in the affairs of men which, taken at the flood, leads on to fortune.
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davkell
Member
Username: davkell
Post Number: 242
Registered: 07-2004Rating: N/A
Votes: 0
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| | Saturday, September 24, 2005 - 01:12 am: |
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Hey H.
I just posted the exact response from Andrew to your question. He stated the purple window text in the PDS is wrong and is looking into it. As to the PDS stating that Marketech is a Market maker etc, I agree with you, it appears to state that they can 'quote' whatever they like.
I'll forward a copy of your PDS post to him, and see what reply I get back.
Cheers.
"Trade Your Way To Financial Freedom" - Van K Tharp
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