Day trading trading penny stocks.......

Final1001

Junior member
21 0
Hi :)

I day trade penny stocks buying shares directly from my broker, I use iii share dealing.

What am I am wondering is it worth me switching and day trading stocks using CFDs, or does anyone else day penny stocks or low cap stocks using CFDs and would they reccomend it or is sharedealing the better option (also I will not be shorting).

The things I dont like is that CFD inquire a rollover charge for holding overnight but im not sure how much the charge actually is, I am also unsure of the execution on CFDs regarding penny stocks. Is buying a CFD similar to sharedealing??

(I will be using IG)

Help on this would be amazing and very much appreciated :)

:idea:
 
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dojistar

Member
71 1
How can you realistically Daytrade Penny Shares. What sort of spread do these stocks have. I want to daytrade stocks were the spread is no greater than 3 cents, ideally a 1 cent spread.
 

Final1001

Junior member
21 0
Thanks tar I recently opened a DMA account with IG and will add a bit of practice money to it, to test it and get used to it. From what I have read about DMA is that your buying straight into liquidity so any shares available on the level 2 order book you will get, which is perfect for I want to do.

Occasionally I might keep the CFD longer than the 1 day, do you know how much is costs to rollover each night, say £1000 worth of shares??

Doji when I day trade through share dealing I trade breakouts and news and will always keep an eye on the spread and how liquid the stock is. If the spread is ridiculous it usually means that no body is buying anyway.
 
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tar

Legendary member
10,443 1,313
Thanks tar I recently opened a DMA account with IG and will add a bit of practice money to it, to test it and get used to it. From what I have read about DMA is that your buying straight into liquidity so any shares available on the level 2 order book you will get, which is perfect for I want to do.

Occasionally I might keep the CFD longer than the 1 day, do you know how much is costs to rollover each night, say £1000 worth of shares??

Doji when I day trade through share dealing I trade breakouts and news and will always keep an eye on the spread and how liquid the stock is. If the spread is ridiculous it usually means that no body is buying anyway.

Hi ,

As you can see in the link i gave you , they charge 2.5% above Libor rate "Based on LIBOR one month overnight rate" , then they divide that by 365 days for UK shares = Daily Rollover , so for long 1K worth of UK shares that would be around 30 pounds annually .
If you trade shares DMA with IG , you are technically trading and buying real shares in the name of IG , they charge you 0.1% /side with a 10 quids minimum .

Dont know which AIM shares you're trading , but thats what they offer : "We offer all shares in the FTSE 350 index, and normally all other UK-listed shares with a market capitalisation of over £10 million."

Shares list :
http://www.marketdatasystems.com/content/files/Current Stock Deal Settings.pdf?
 

Final1001

Junior member
21 0
Yea thanks again tar. I just found that overnight charge for CFDs and funnily enough also calculated £1000 worth of shares and it comes to £25 for 365 days, so like 0.07p a day,which is nothing and thats fine for me, I can live with that thought it was alot more for some reason lol
 
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Final1001

Junior member
21 0
doji I will generally not buy if the spread is over 5% and will only buy if there is momentum and other people are buying so the spread is normally below 5%.
 
M

member275544

0 0
Yea thanks again tar. I just found that overnight charge for CFDs and funnily enough also calculated £1000 worth of shares and it comes to £25 for 365 days, so like 0.07p a day,which is nothing and thats fine for me, I can live with that thought it was alot more for some reason lol

don't forget the commission charge on top, which is £10 each way, so thats £45 for 365 days. a lot more than your iii share dealing
iweb charges only £5 each way, and you get true market prices :cool:
 

Final1001

Junior member
21 0
Yea good point malaguti, but dont forget no stamp duty and I think there are tax benefits for CFDs.

Looked into IG in more depth and seems they are not really good on AIM companies, so I will probably have to stick to sharedealing but I will most likely still use their CFD/spread betting service for mid-cap companies.
 
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M

member275544

0 0
Yea good point malaguti, but dont forget no stamp duty and I think there are tax benefits for CFDs.

Looked into IG in more depth and seems they are not really good on AIM companies, so I will probably have to stick to sharedealing but I will most likely still use their CFD/spread betting service for mid-cap companies.

there are no tax benefits on CFDs afaik, but obviously if you use an ISA, its tax free.
stamp duty, yep I know but it still won't come to anything close what you could be paying via CFD on IG
iii are charging £10 unless you are trading 10 per month so if you are day trading then you will obviously qualify..you know this already though. But consider shopping around is my main point
 

tar

Legendary member
10,443 1,313
there are no tax benefits on CFDs afaik, but obviously if you use an ISA, its tax free.
stamp duty, yep I know but it still won't come to anything close what you could be paying via CFD on IG
iii are charging £10 unless you are trading 10 per month so if you are day trading then you will obviously qualify..you know this already though. But consider shopping around is my main point

Stamp duty is 0.5% , plus you have to pay the regular commissions per trade , however with IG you pay 0.1%/side .
 
 
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