CFD's for indexes

[bikhod]

Hi

Using the SelfTrade CFD simulator, I have been comparing index CFD prices with the equivalent spread bet ones on IG Index spread betting. The spread bet spreads seem to offer a better spread than the CFD ones!

Is this surprising or have I misunderstood something. I was under the impression that CFD spreads are very close to the "cash" price.

Shares price spreads on CFD are very good and appear to be at the cash market price.

Does all of this mean that CFD are good for shares but not that good for indexes?

Thanks

P.S. I am new to CFD's

 

[THE WOLF2222]

Regarding the indices, the CFD will take into account the equivalent underlying futures market contract and factor in any costs. (The CFD market maker may hedge the position in the futures market and there will be a cost involved in doing this).

In general, a spreadbetting operation will usually be a market of it's own and may not exactly mirror the underlying. (Hedging is also less likely).

I notice that you have compared priced from your selftrade platform to the IG prices. The costs involved with the CFD may be outweighing the spread you would pay on the spreadbet, but it is hard for me to tell without more detailed information.