CMC, Deal4Free, Warning

[Maverick]

I think most of the experienced traders in the chatroom know about the problems with CMC Deal4Free.

This system is not useful for US daytrading, but ok for the UK market, or so I thought. However today I have spotted another potentially devastating problem.

Today I tried to open a short on Logica, for the order to go yellow for a whole two minutes. Then a white screen superceded the yellow and stated ‘Order not processed as trader is unavailable’.

Then I realised that it was 2:45, 15 minutes after the US had opened. It turns out that the Nas was diving and CMC were very busy. It could be, I don’t know that UK shares were also moving down sharply.

Now then if there is one time when you want quick efficient execution, it’s when the market is crashing. If you miss the boat on a long taking off, it’s bad enough. But if you cannot get out of a long during a panic, then you’re in deep trouble.

In my opinion, at the moment there is still a lot of fear in this market. So even whilst we start to rally, the slightest hiccup can send the market into a freefall. So if you are long through CMC, are you gonna be able to get back out?

It’s like trying to ring your broker in the old days.

If you are short, then it shouldn’t matter so much. I can’t see the market taking off that quickly.
Just a thought, boys and girls, and I hope no-one ever gets caught out. Today I couldn’t get into the trade at the right price. Tomorrow I might not be able to get out of the trade at any price.

Be careful out there and watch your shares and the market like a hawk.

 

[MX]

I agree with you on this one Maverick CMC is a very useful trading platform but when the market is very busy can be a dangerous tool.
I trade with CMC on a daily basis and would recommend that before you enter any trade you decide your exit points that is stops and target.
CMC do offer a number of feature that I'm sure people do not make the best use of and if used correctly can save and make you a lot of money.
When you open up a order ticket you have MARKET ORDER with this you can trade at the market price quoted (or re-quoted as often happens).
On the sensitive issue of re-quotes, if the market is moving fast and the price changes during the time it takes for your order to get picked up at the other end you will get a different price this is very frustrating and I have spent many times on the phone to CMC about this. But I guess its no different to being on the phone to you broker and if you can avoid trading at times like this all the better.

You also have LIMIT ORDER I do many trades in the day and find this very useful. I use this to buy and sell my stock you can set up the trade target price and wait. I use this to buy on support and resistance say like TWT it bounced off 100 many times ran up to 110 and back down again. I used to set a buy limit at 102 if the stock spiked down I was in then set a sell limit of 110 and let it run with a stop in at 98p. This trade worked a good number of times.

STOP ORDER I recommend that you set stops when placing the trade even if you set them a bit below were you would like to exit, they will then act as a safety net in case bad news hits the stock. If you cannot then place a trade for what ever reason you stop will protect you. You may not get the price you set the stop at but will get filled at the nearest trade that is done to your stop.

OCO Order cancels Order This is used to set a target and a stop so say on TWT I am in the trade at 102 I can set a stop at 98 and a sell order at 110 if either of these is hit it cancels the other order.

These are all very useful tools in CMC and I recommend that you make best use of them in your trading.

MX

 

[henry766]

i think they have tightest spreads for us stocks spreadbetting wise don't they?

 

[MarvinS]

Yep they may have the tightest spreads but on the rolling here is the trick!!!!
CMC may charge you a very narrow spread on opening, however the daily interest paid or received is negligable. Libor/Libid - CMC pay u -3% on the short and you pay +3% on the offer. Most brokers will charge 1% max either side. Welcome to the great world of CMC!!!!

 

[danfreek]

Maverick, Other people on this board have said this before, but it's always a good idea to have two accounts, one for your normal trading, and another to hedge with if you can't get hold of your broker when you need to. It certainly takes the worry out if you know you can just call the other company up if anything happens.

Of course it's possible that both of them could be unavailable!

 

[john88888]

MX and Maverick,
All I have ever heard about CMC is bad news! Requoting/rejecting prices, having you over on the interest rates, poor order system and now they don't even have the tightest spreads in the market!

I still haven't had any probs with my broker (FS) and their execution and order facility is the best I can find at the moment.

If you stick with them, good luck!

 

[Racer]

Personally speaking I wouldn't touch them having spoken to a lot of traders over the years

 

[MarvinS]

88888 - Do you usually find you are more inclined to use who you usually use?
Brokers that have the tightest spreads usually offer the worst service - Mcdonalds on the one side
compared to Chips and burger at the Ritz. But then again CMC are now worth hundred of millions, so what do they care.

 

[stevespray]

I noticed that the original post was some 4 years ago!

Steve.