D4F - cheapest for FTSE350?

[nigelpm]

Initially posted here:

http://boards.fool.co.uk/Message.asp?mid=9165031


Taken from 4:30 prices today:

PMO cash was : 594 - 599.5p mid : 596.75p
PMO Mar 15th : 594.5 - 600p mid : 597.25p
PMO Jun 14th : 602 - 607.5p mid : 604.75p

Thus : 604.75p - 597.25p = 7.5p

7.5p / 597.25p = 1.25% (5% annually) or roughly LIBOR.

Thus we take the 1.25% interest charge for the next quarter at rollover time.


I have been assured that there is no spread charge on automatic rollover.
(i.e. the current contract is closed at the mid point and the new contract is opened at mid point.)

So the cost of holding a FTSE-350 share on D4F (CMC) is 5% per annum + any extra spread on the share at time of buying and selling (around 0.2% from rough looking around)

So it seems D4F has no competition at all for it's quarterly bets in the FTSE350 and is the cheapest Spreadbetter assuming my calcs are correct -

anyone care to disagree?

 

[the blades]

I believe that Capital Spreads offer better interest rates, though the extra spread on FTSE100 co's is 0.3% and 0.5% on FTSE250.

If you look at my thread "spread prices" you will see that CS average interest charge is around 4%. They factor in 4.8% currently so the lower rate is the effect of factoring in dividends due.

To get a good handle on D4F, I think you'd need to do a comparison with a bigger basket of shares.

Either way, there's not a lot in it - they both seem ahead of the rest in terms of "VFM".

All the best,
UTB

Edit - I must add though, If like me you trade a lot with credit accounts and "wide" stops, the effect of recieving interest on the money you'd otherwise have tide up in margin is the reason (I believe) the likes of Finspreads and IG Index are not totally left behind. But for my frequent trades, it's CS every time.

 

[Racer]

Before you start thinking of trading with d4f .. look at the other threads about them. If other spread betters don't do it then watch out.. if youare successful they will not like it and make if very difficult for you to trade it.

 

[the blades]

Before you start thinking of trading with d4f .. look at the other threads about them. If other spread betters don't do it then watch out.. if youare successful they will not like it and make if very difficult for you to trade it.

I'm afraid I couldn't get past their platform, let alone make money with them

But that probably says more about me than them.....

UTB

 

[Racer]

Be wary of trading shares/indices with d4f that are not regularly traded.

 

[nigelpm]

I have traded with D4F for three years with no issues whatsoever however I only trade in small quantities - when I've put through the occasional big order I've had the yellow ticket - but then it's hardly surprising given that they need to hedge themsleves.

 

[Racer]

If you want to trade in big orders, forget d4f, go for a decent direct access trading platform

 

[Racer]

BTW if you want to trade MIDD as a way of trading the 250 it is very thinly traded on the book and virtually impossible to get filled!

 

[evansj]

I have a problem with their Marketmaker software. They have 2 versions - a java application that downloads after 'live log-in' that seems only to only work with Microsoft Java Virtual Machine (MSJVM) and not with Sun Java. Also the full version which they provide on CD - this installs OK but then hogs 99 to 100% of the CPU making the application and my PC unusable. Anyone come across the same problems?

 

[Effkay]

Don't know if anyone saw this in the rich list the other week:

"Business is booming at CMC, the London-based financial group, and bankers are pressing for a floatation. As founder and owner, Cruddas, 51, will not go down this route until the company is worth £1.5 billion. CMC is a market leader in internet financial spread betting, trading in equities, indices, derivatives, commodities, oil and currencies. In 2004-05 the group made nearly £40m profit and bankers put a £900m valuation on the business"

It seems they're the ones making the real money!!!! Surely this can't all be out of the spread?!!!

 

[Racer]

It seems they're the ones making the real money!!!!

Exactly!
Why have they got the nickname Steal 4....

Go for a decent broker if you want to be treated properly