Good CFD provider?

[roy12]

Who is a good provider of CFD's in UK with no commission an tight spreads? Looking for trading FTSE100 index for small price movements.

I tried a few: plus500, intertrader, saxomarkets and spreadco but was wondering your preferred provider and some reviews would be great...


Another question, does level two pricing give an advantage to have for a new trader or is it not needed? A lot of providers do not seem to provide this...

 

[gle101]

Who is a good provider of CFD's in UK with no commission an tight spreads? Looking for trading FTSE100 index for small price movements.

I tried a few: plus500, intertrader, saxomarkets and spreadco but was wondering your preferred provider and some reviews would be great...


Another question, does level two pricing give an advantage to have for a new trader or is it not needed? A lot of providers do not seem to provide this...

Well Capitalspreads is good, I also trade live with DF Markets, the later have variable spread, usually very tight (0.5-1 point spread).

How did you like trading with Spreadco?

 

[roy12]

Well I have not traded Spreadco yet. I have used the demo and the spread for the FTSE100 is about 1 point - so I think that is reasonable?

I think the problem is I want to trade in and out fast and take some profits and because the spreads are 1point, some shares are 1-3 points plus - it makes the trading a little harder.

But I guess this is the problem everyone has.. Altough Spreadco do not charge commission so I guess that should be taken in to consideration, altough most dont charge commision on the FTSE100 index but just on shares.

 

[gle101]

Well I have not traded Spreadco yet. I have used the demo and the spread for the FTSE100 is about 1 point - so I think that is reasonable?

I think the problem is I want to trade in and out fast and take some profits and because the spreads are 1point, some shares are 1-3 points plus - it makes the trading a little harder.

But I guess this is the problem everyone has.. Altough Spreadco do not charge commission so I guess that should be taken in to consideration, altough most dont charge commision on the FTSE100 index but just on shares.

Scalping with SB or CFDs is quite hard, and they are not to fond of short term traders. One can run into problems in the long run being "too" successful.

 

[roy12]

Scalping with SB or CFDs is quite hard, and they are not to fond of short term traders. One can run into problems in the long run being "too" successful.

So what is the best types of trading with CFD's? I find the FTSE100 moves up and down alot through the day.. Surely a few trades through the day can net in 20-30 points?

I have noticed the shares for alot of companies are slow and tend not move around alot - so your right there, this would be real hard to scalp.

I havnt looked are trading Forex with CFD's.

Maybe I am thinking more along the lines of day trading / swing trading and calling it scalping by mistake then. I would like to trade a few times a day and maybe sometimes stay in for a few days at most.

 

[moka2]

Scalping with SB or CFDs is quite hard, and they are not to fond of short term traders. One can run into problems in the long run being "too" successful.

If you trade Futures the issue of conflict with broker does not arise! you are not trading againt the broker/ firm like you would in a CFD or SB

What is the leverage you get with FTSE CFD/ SB as comapred to Futures!
Or are there other Tax issues why people prefer SB over Futures!

 

[gle101]

If you trade Futures the issue of conflict with broker does not arise! you are not trading againt the broker/ firm like you would in a CFD or SB

What is the leverage you get with FTSE CFD/ SB as comapred to Futures!
Or are there other Tax issues why people prefer SB over Futures!

Yes many prefer the lower entry level trading SB and CFDs. I wouldn't recommend a newbie to start trading the futures. Trading the FTSE (Z future) would just be to high of a stake size.

 

[moka2]

What is the size of 1 CFD contract on FTSE as cmpared 1 FTSE futures contract
If it is teh same the risk is same and if CFD requires lower margin for the same size contract then CFD is more risky
Also one should not ignore teh risk of an CFD being an OTC product.. = conflict of interest with teh provider ( unless it is tru DMA CFD!)
Futures are true Exchaneg traded!
We ahve to compare apples to apples ..
With respect to S&P 500 for example the big contract is 5 times small contract

 

[gle101]

What is the size of 1 CFD contract on FTSE as cmpared 1 FTSE futures contract
If it is teh same the risk is same and if CFD requires lower margin for the same size contract then CFD is more risky
Also one should not ignore teh risk of an CFD being an OTC product.. = conflict of interest with teh provider ( unless it is tru DMA CFD!)
Futures are true Exchaneg traded!
We ahve to compare apples to apples ..
With respect to S&P 500 for example the big contract is 5 times small contract

£10 (£5 each tick) entry level is quite high, at least for me. Would be just devastating for a newbie in my opinion to trade the FTSE Z-future. You will react emotionally completely different with such a "high" stake size compared to if you have £1 on the table. Also you have to look at money management, much more capital is needed in order to have proper money management in place (1-2% of your capital in one position at risk).

 

[roy12]

I was not aware of OTC and DMA until you wrote about it. I have looked it up an will try to find an DMA provider instead of OTC.

What is the size of 1 CFD contract on FTSE as cmpared 1 FTSE futures contract
If it is teh same the risk is same and if CFD requires lower margin for the same size contract then CFD is more risky
Also one should not ignore teh risk of an CFD being an OTC product.. = conflict of interest with teh provider ( unless it is tru DMA CFD!)
Futures are true Exchaneg traded!
We ahve to compare apples to apples ..
With respect to S&P 500 for example the big contract is 5 times small contract

 

[moka2]

What we need to find out is Contract size, Spread and Leverage
and then comapre apples to apples
Re DMA or MM you still have counterparty risk with CFD..

 

[roy12]

I was reading up on DMA which seems a better way to trade over OTC. But this is only available on shares, if you are trading indices like I hope too - you can’t trade DMA.

Therefore, there are two options; trading OTC and knowing that you are trading with a broker or trade futures instead.

If I was using Saxobank, they offer;
Contract size; from 1 CFD
Spread is 0.8/1 point (normally)
Margin is 1%
1 Point = £1

Trading futures is around £5 per trade for commission. Plus I do not know enough to trade them.

Of course, CFD carry risk, but unlike share prices, index trackers cannot go bust (highly unlikely).

If I was to trade shares than Saxobank offer DMA and level 2 pricing. But this comes as extra and they charge commission of around 0.10% min £15 and £6 per month for level 2 pricing from London Stock Exchange.

Therefore, I think for a new trader with a small bank, who wants to trade FSTE100 index, OTC is the most reasonable in terms of cost for the size of trades he wants. I think once becoming more knowledgeable within the market is when trying other trading products/methods would only then be a good only?

What do you think?

 

[moka2]

"Of course, CFD carry risk, but unlike share prices, index trackers cannot go bust (highly unlikely)."

You mean the Index tracker ETF or CFD won;t go to zero yes but when I was talking about going to burst I was talking about the broker going burst! and you having no protection whatsoever
1 FTSE Futures contract value = X / MArgin required Y = N
X no of FTSE CFD ( of same $ value as the Futures contract) = X1 / MArgin for CFD Y1 = N1
If N1 is > N then yes CFD trading is less capital intensive but your risk remains same...
If FTSE goes down by 10% you loose 10% on the complete contract value
+ additional risks of CFD ( even DMA)

 

[roy12]

"You mean the Index tracker ETF or CFD won;t go to zero yes but when I was talking about going to burst I was talking about the broker going burst! and you having no protection whatsoever"

What do you mean by, broker going burst? I am a newbie, that's actually a good question to ask.. What would happen, would the trade not just automatically close at current price or something? What would happen?

 

[moka2]

What I mean is the broker business itself going burst due to any reason and lets say you have either a CFD position or cash seating in broker account
and depending upon , country laws, what kind of broker ( Equity, Futures OTC CFD etc)
Yoy may not have any protection
Ask FSA in UK what is covered and what is not
any way you original question was apples to apples between CFD and Futures

1 FTSE Futures contract value = X / MArgin required Y = N
X no of FTSE CFD ( of same $ value as the Futures contract) = X1 / MArgin for CFD Y1 = N1
If N1 is > N then yes CFD trading is less capital intensive but your risk remains same...
If FTSE goes down by 10% you loose 10% on the complete contract value