Spot forex vs CFD forex

WallStreetHero · Dec 30, 2008

which is better and prefered by traders, i started trading spot forex but the roll overs are really annoying so changed and started trading forex on cfds, that is probably one advantage of forex on cfds whats the others

Rhody Trader · Dec 30, 2008

I'm not a CFD trader, being in the U.S., but I'm thinking that you're still getting the impact of interest carry on your positions. It's priced into the contract, as with futures. If not, then there's a serious arb to be had.

jeffsmith · Jan 2, 2009

Both trades have there own advantages
Advantages of Spot Forex Trading
Highly trending markets
No commissions or hidden fees
Better leverage
Trade off of your profits
and many more.............

Advantages of CFDs are:
CFDs allow you to trade world leading stock indices, as well as commodities and metals, on one platform on-line.
Leverage your deposit by 20 times or more to maximize profits.
Make big money from minor movements in the market.
Trade long and short to make money under all market conditions.
No commissions, no fees
and many more...........

This decision whether they would like to go with CFD are with spot forex is totally individual decision. SO each one has its own advantage and pitfalls. hpoe i solved your puzzle a bit.

ForexExpert · Jan 5, 2009

Each broker has its own advantages & pitfalls as Jeff said. I would personally recommend CFD Forex from experience.

Magos · Jan 9, 2009

suhaib said:
which is better and prefered by traders, i started trading spot forex but the roll overs are really annoying so changed and started trading forex on cfds, that is probably one advantage of forex on cfds whats the others

Spot FX
A spot trade is either buying or selling at a current rate. It involves a direct exchange between to currencies. It involves cash instead of a contract and interests are not included upon the agreed transaction.
This transaction is a 2 day delivery transaction (T+2). Except CAD pairs which are T+1.
If you want to keep the position open or rollover you must enter into a swap transaction involving your currency pair.

FX CFDs
FX CFDs are spot trades which close and reopen in the end of the day. Therefore no physical delivery will every take place.
FX CFDs have Rollover financing: Clients will either receive or pay financing.
If a client is LONG and has a higher interest yielding currency it will be credited
If a client is LONG and has a lower interest yielding currency it will be debited
If a client is SHORT and has a higher interest yielding currency it will be debited
If a client is SHORT and has a lower interest yielding currency it will be credited

Magos · Jan 9, 2009

Magos said:
Spot FX
A spot trade is either buying or selling at a current rate. It involves a direct exchange between to currencies. It involves cash instead of a contract and interests are not included upon the agreed transaction.
This transaction is a 2 day delivery transaction (T+2). Except CAD pairs which are T+1.
If you want to keep the position open or rollover you must enter into a swap transaction involving your currency pair.

FX CFDs
FX CFDs are spot trades which close and reopen in the end of the day. Therefore no physical delivery will every take place.
FX CFDs have Rollover financing: Clients will either receive or pay financing.
If a client is LONG and has a higher interest yielding currency it will be credited
If a client is LONG and has a lower interest yielding currency it will be debited
If a client is SHORT and has a higher interest yielding currency it will be debited
If a client is SHORT and has a lower interest yielding currency it will be credited

If you are interested in Spot FX, you should really understand how swaps work, and monitor both SPOT and SWAPS in currency pairs

If you are just learning go with FX CFD's and try to not get over leveraged

Spot forex vs CFD forex

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