Why IG Index or GFT has wide spread on DJIA fut.?

M

m1000

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• Nov 28, 2008

• #1

Why IG Index or GFT has 8 points of spread on DJIA fut.? CBOT has 2-3 points of spread on djia fut ($5) + $5 commission - It`s total only 3-4 points.

 

foredog

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• Nov 28, 2008

• #2

To make money becasue they don't charge an actual commission so it's in the price.

That way if the CBOT price is 8741 -8743 and they are making 8738 8746 they can either try and close off your trade for 3 points in the CBOT or take it on there book and gope it gets offset.

 

M

m1000

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• Nov 28, 2008

• #3

OK, but for example GFT has only 2 pips!!! on DJIA SPOT. How they hedge it? Using stocks of 30 companies to create spot djia it`s too expensive. Maybe Diamond Dow? But this ETF has larger spread+commision? or i`m missing something

 

JTrader

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• Nov 28, 2008

• #4

worldspreads dow futures is a 2 pip spread.

 

T

TomTom

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• Nov 28, 2008

• #5

Direct market is 1 point Bid/Offer for DOW

 

G

gle101

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• Nov 29, 2008

• #6

TomTom said:

Direct market is 1 point Bid/Offer for DOW

Click to expand...

Of course you have to add the commission to calculate the spread. IB is probably the best broker, if tax and higher stakes is no issue trading the Dow (YM future).

 

T

TomTom

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• Nov 29, 2008

• #7

gle101 said:

Of course you have to add the commission to calculate the spread. IB is probably the best broker, if tax and higher stakes is no issue trading the Dow (YM future).

Click to expand...

Trade 1 contract at 1 point and $3.70 per trip this works out at a spread just under two.

Yes if this was a SB the spread would be 4 pts or an extra 2pts time the per point bet.

 

M

m1000

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• Nov 29, 2008

• #8

Interactive brokers has total $5 commision for open and close 1 contract. So if I trade $5-sized djia then it`s equivalent of 1 point spread. If I trade $10 sized, then then it`s equivalent of 0,5 point spread.

So as I say, bid/ask difference (on cbot) is usually 2 points + commision.
I still don't understand why GFT has 8 points on djia fut. and only 2 points on djia spot.
Does really to hedge spot for bucket shop is much simple than to hedge futures?

 

P

Phil Mibbutz

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• Nov 29, 2008

• #9

Isn't it mainly because you have to pay to hold a 'cash' bet overnight? WS's 2pt is for a 'rolling future', which doesn't really make sense. (Not that anything makes sense in spreadbetting, from a punter's perspective!)

 

W

WaveMaster

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• May 29, 2009

• #10

I'm looking to trade DJIA Spot, can I have the website for GFT? Any other brokers offer DJIA Spot? Is there any advantage of trading DJIA Futures over Spot?