Book Project

pubmanager · May 12, 2009

Hi,

I have recently started researching for a book I've been asked to write about CFDs and would like to hear from people who actively trade these instruments. I am in very early, exploratory stages and I haven't even got firm ideas on the approach/angle I want to take or how to structure the book.

I am interested in knowing why other traders have chosen to use CFDs (particularly as opposed to spreadbets)

I am also looking for people who make their living trading who would be willing to talk to me - this is "the dream life" for many starting out and I'd like to collect stories of successes and failures in the markets, experiences to pass on, even trading basics and strategies etc. (I may want to use case studies or something similar to give human interest.)

I know there is a lot of this type of material in the threads but I wanted to be clear about my motives and make sure people were aware of this fact when posting.

Any input from those who are willing and interested would be warmly welcomed.

Just remembered this is my first post, I've spent so long reading the boards that I forgot - guess it's worth clarifying that I'm not actually a pubmanger!

Mr. Charts · May 12, 2009

"Just remembered this is my first post, I've spent so long reading the boards that I forgot - guess it's worth clarifying that I'm not actually a pubmanger!"

So is pub manager your ambition then?

pubmanager · May 12, 2009

My past... thankfully, although it served its purpose.

Black Swan · May 12, 2009

pubmanager said:
Hi,

I have recently started researching for a book I've been asked to write about CFDs and would like to hear from people who actively trade these instruments. I am in very early, exploratory stages and I haven't even got firm ideas on the approach/angle I want to take or how to structure the book.

I am interested in knowing why other traders have chosen to use CFDs (particularly as opposed to spreadbets)

I am also looking for people who make their living trading who would be willing to talk to me - this is "the dream life" for many starting out and I'd like to collect stories of successes and failures in the markets, experiences to pass on, even trading basics and strategies etc. (I may want to use case studies or something similar to give human interest.)

I know there is a lot of this type of material in the threads but I wanted to be clear about my motives and make sure people were aware of this fact when posting.

Any input from those who are willing and interested would be warmly welcomed.

Just remembered this is my first post, I've spent so long reading the boards that I forgot - guess it's worth clarifying that I'm not actually a pubmanger!

can you read the forums without registering first?

pubmanager · May 13, 2009

Black Swan said:
can you read the forums without registering first?

Not sure, I registered in Jan.

ukdaytrader · May 13, 2009

I use CFD's as I understand them better. I've not take the time to understand spread bets in great detail. With CFD you basically borrow money, buy an instrument with it and when you sell it repay back the capital and accumulated interest. This makes sense to me. Also if you keep the position open for a week or 2 you pay interest on the amount borrowed. With spread bets Im not entirely sure what happens when the position is rolled over and how this is priced and whether this is a fair price for a roll over or not.

The drawback is that you pay taxes on the gains.......but then I don't mind paying my fair share of taxes. There has to be some re-distribution of wealth.

Also with CFD' the quote you get is the market quote and if you use options pricing spreadsheets the prices correctly work.

So I use CFD's because I don't understand how the spread on spread bets is priced.

robster970 · May 14, 2009

ukdaytrader said:
So I use CFD's because I don't understand how the spread on spread bets is priced.

Ditto - pricing transaprency is what does it for me. Way I see it is what you lose in CGT is offset by the comparatively huge spread in SB and the basic premise that this spread dimishes your chances of your trades moving into profit. I've never empirically tried to prove this but having seen spreads that are 5-10x the spread on a CFD I can't help but feel that this would seriously diminish my win%, average win and average lose to make me unprofitable.

Would be interesting to see how they work out if somebody put in the time to work it out.

Technically Fundamental · May 14, 2009

ukdaytrader said:
I use CFD's as I understand them better. I've not take the time to understand spread bets in great detail. With CFD you basically borrow money, buy an instrument with it and when you sell it repay back the capital and accumulated interest.

CFD = Contract For Difference.

Its basically a legal document by which you enter an agreement to settle the difference in price at the time you agree to enter and exit the trade. No underlying security, currency etc is actually purchased. This is why it's exempt from stamp duty. Interest can be accrued or paid depending on your position if trades are held overnight.

The spread is the brokers fee just like in spreadbetting.

pubmanager · May 14, 2009

Thank you for contributing.

I am I right in thinking that you all use DMA platforms as opposed to market makers or would you say that even the market makers spreads on CFDs are tighter than the spreadbetting co.'s?

I also agree with the comments on transparency - CFD providers are required by the FSA to show how they derive price and charges. Spread betting companies are not.

Having said that, my impression is that competition amongst spreadbetting houses in the UK has made them a bit more honest and spreads are getting tighter on the "headline markets".

Also, I think the distinction between CFD & Spreadbets is becoming less clear, less obvious. What does anyone else think?

Technically Fundamental · May 14, 2009

Dont think it matters tbh mate. Personally I just find the CFD platforms a bit easier to use and if I'm not mistaken you can get hold of more information on them.

If you're making over 9.5k profit you'll pay tax on CFDs.

WallStreetHero · May 15, 2009

i use cfds because i found great success in them when i started, i didnt look into spread bets till later and i hate the whole roll over process, thats what makes CFDS so good for forex is well. spreadbets are just bucket shops with no gov. regulation and brokers can do what they want, many people have reported positions opening and closing automaticly and many other weird things about spreadbets, so i keep safe with CFDs and there are no taxes on CFDs what i use.

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