CFD questions

[australiaboy]

Hello!

I'm pretty new to this CFD trading thing, so I was hoping you guys in here could help me with a couple of things:
1) What happens if the CFD company goes bankrupt? Are my money insured?
2) If the orders are not executed in the real stockmarket, do they (the CFD companies) operate with depth (in the bid and ask price)? Or is it no problem for me to get a large post filled in seconds (to the best bid/aks price)?
3) I have to use trailing stop in my trading. Are there any CFD companies that offers this, or do they only offer regular stop orders?
4) It looks like TradeStation is a very good platform (with this automatic trade thing...). Can I trade CFD's from them? If not, are there any CFD companies that are very simulare to TradeStation?
I'm very gratefull for ALL answers!!

Best regards
Joergen

 

[vetten]

Hello!

I'm pretty new to this CFD trading thing, so I was hoping you guys in here could help me with a couple of things:
1) What happens if the CFD company goes bankrupt? Are my money insured?
2) If the orders are not executed in the real stockmarket, do they (the CFD companies) operate with depth (in the bid and ask price)? Or is it no problem for me to get a large post filled in seconds (to the best bid/aks price)?
3) I have to use trailing stop in my trading. Are there any CFD companies that offers this, or do they only offer regular stop orders?
4) It looks like TradeStation is a very good platform (with this automatic trade thing...). Can I trade CFD's from them? If not, are there any CFD companies that are very simulare to TradeStation?
I'm very gratefull for ALL answers!!

Best regards
Joergen

Hi Ozzie,

1. No your money is not insured and you`ll lose it all

2. On a quote driven system a big order might not be filled in seconds, but on an average price in say the first 5 minutes.
If you want to buy at the opening price, you will need to access a provider with DMA platform
where your order goes straight into the market

3. For me a trailing stop is important too. If I could put in my order before market opening and also trailing stop and stop loss I would be a happy boy. That way evrything would happen automaticly, without me being behind the computer.
I asked around but at present nobody seems to offer trailing stops.

4. I haven`t heard of TradeStation....who is offering this platform?

Seeya

 

[australiaboy]

Hi Ozzie,

1. No your money is not insured and you`ll lose it all

2. On a quote driven system a big order might not be filled in seconds, but on an average price in say the first 5 minutes.
If you want to buy at the opening price, you will need to access a provider with DMA platform
where your order goes straight into the market

3. For me a trailing stop is important too. If I could put in my order before market opening and also trailing stop and stop loss I would be a happy boy. That way evrything would happen automaticly, without me being behind the computer.
I asked around but at present nobody seems to offer trailing stops.

4. I haven`t heard of TradeStation....who is offering this platform?

Seeya

Thanks for your answer! I thought nobody would ever answer me...

What do you mean by a "DMA platform"? Who can provide me with this?
You can visit TradeStation on www.tradestation.com .

Best regards
Joergen

 

[nobrainer]

DMA is direct market access.......provided in the uk by etrade.com and gni.com amongst others.

 

[vetten]

Thanks for your answer! I thought nobody would ever answer me...

What do you mean by a "DMA platform"? Who can provide me with this?
You can visit TradeStation on www.tradestation.com .

Best regards
Joergen

Hi Joergen,

You can only see the depth in the market on a DMA platform and put your order in at a price YOU want. What happens is that you put in the order in the name of the broker you`re with on the stock market for you to see and when the order is filled, the broker has hedged your position with them.
With a sizeble order it`s better to use the DMA platform in a fast moving market; with a quote driven system it might be impossible to get filled at the opening of the market.

IG Markets is one of the best according to my City advisor and I might open an account with them soon if we can agree on the commission. They have a DMA platform for Europe, Australia and the US and a quote driven system for Japan and Hongkong.

It`s such a shame that at the moment no broker offers a % stop loss and a % trailing stop.
If that were possible, I could put in my orders before market open with stop loss and trailing stop attached and go fishing. Everything would go automaticly without any emotions involved.

I hope this is some help to you Joergen.

Seeya.

 

[Ingot54]

Hi Australiaboy

I'm also an Aussie from Queensland.

I use IG Markets ( igmarkets.com.au ) and find them to be easy to use.

They are CFD providers, (as opposed to Market Makers - Bookmakers, imho), who actually buy the underlying when you place your order. There is no slippage or spread when buying shares, but commissions apply, which I am happy to pay, for the guarantee of price, security etc.

Download their PDS - fairly simple.

 

[vetten]

Hi Australiaboy
I'm also an Aussie from Queensland.
I use IG Markets ( igmarkets.com.au ) and find them to be easy to use.
commissions apply, which I am happy to pay

Hi Ingot, :cheesy:
Commission at IG Markets might be a bit on the high side.
What do you pay?

ManFinancial Australia has DMA and with a bit of arm twisting their commission
is down to 0.125%
They charge $ 99.00 per month to use their platform online, but you can
negotiate it down to $ 50.00 or less.
You can also ring in your orders and don`t pay for the platform

 

[Ingot54]

Hi Ingot,
Commission at IG Markets might be a bit on the high side.
What do you pay?

IG Markets have a 2-tiered structure.

The "Professional" or active traders with trades over $12,500 will be charged 0.2%, with a minimum of $50 ($100 round trip).

Regular account users will be charged $0.4%, with a minimum $25 ($50 round trip).

A $10,000 position will attract $40 commission, plus $30 Guaranteed Stop Loss Order for a Limited Risk account. By opting to set up a Limited Risk account, you will be asked to stump up a smaller margin up front. Other conditions, such as setting the GSLO no closer than 5% away (generally a bit more, in my experience).

You have inspired me to ask for concessions, Vetten. It never occurred to me to bargain - but then I have only opened 2 X $10k positions so far - hardly a star customer!

 

[Ingot54]

By the way, IG Markets do not charge the "Platform" fess - they pay this access fee for you - I think that's good value for my commission, alomg with the Guaranteed price to match the underlying Exactly, with NO slippage - priceless.

It was the total package that impressed me, rather than one feature. Add to that the fact that IG Markets are CFD Providers, not Market Makers (bookmakers).

That does not mean they do not act as market Makers from time to time - they will, if the risk is small, but generally they actually buy the underlying shares at the same time and price you do.

That's one reason to choose stocks with excellent volume. Why buy stocks with difficult levels of volume - there are thousands of others to pick from - don't complicate life.

 

[techst]

Trailing Stops are more of a technique than a physical product. So most of those who use them apply it manually. Similar to using break even stop. Nobody actually offers them as a service it's more a money management style like trailing.

 

[Ingot54]

I agree, Techst@.

With IG Markets, I choose when I want to ratchet-up the SL position - the beauty of this is I do not have to pay a fee every time I move the GSLO.

I believe CMC (D4F) DO charge EVERY time the GSLO is moved. Makes the low commission seem fairly expensive after the first two or three moves.

However, I agree - go for it if you do not want a Guaranteed Stop. Here in Australia, CMC are quoting $35/month access fees to trading platforms - IG Markets offer this free.

I guess it's just that I like money in my account - not in theirs. Better service - cheaper costs. But that's just my interpretation of what has been presented to me, plus my own experience.

No one has yet presented a reason to use the CMC package over what is offered by IG Markets.

Cheers

 

[MangeMan]

GCI have trailing stops since 2005

 

[tonygamble]

Australiaboy

You asked:-

1) What happens if the CFD company goes bankrupt? Are my money insured?

You were told you'd lose your money.

If you have a CFD with a UK regulated company almost certainly your money will/can be put in a segregated account and this is ring-fenced from the funds of the CFD company itself.

Tony