interactive brokers index cfd pricing question

[f2calv]

I'm presently looking into alternative brokers to trade Index CFDs through, I've heard IB are quite competitively priced but I'm having a blonde moment trying to decipher their pricing model - probably made harder given that with IG I'm used to paying solely via the spread.

Taking the FTSE 100 for example (IBGB100) what would the costs be for opening the equivalent of a small £1/point position?

According to their example at the bottom of https://www.interactivebrokers.co.uk/en/index.php?f=commission&p=cfd2

"Times index level. For example: If the index level for IBGB100 is 5940
Minimum order size 1 unit x 5940 = GBP 5940"

0.005% of £5940 would mean a fee of £29.70 ... which clearly can't be right, or can it? :|

 

[options-george]

0.005% of £5940 would mean a fee of £29.70 ... which clearly can't be right, or can it? :|

1% of £5940 = £59.40
0.5% = 29.70
0.05% = 2.97
0.005% = 0.297

 

[f2calv]

Cheers... my absolute humiliation is complete!
Can someone please this thread?

 

[remme001]

If you're in the UK and your trading isn't your sole source of income then I really see no point in going for CFD's over spread betting unless you like paying the extra capital gains tax and filling out your tax returns.

 

[f2calv]

If you're in the UK and your trading isn't your sole source of income then I really see no point in going for CFD's over spread betting unless you like paying the extra capital gains tax and filling out your tax returns.

Yep, thanks for that

 

[DT]

Taking the FTSE 100 for example (IBGB100) what would the costs be for opening the equivalent of a small £1/point position?

you can't open such a position AFAIK - the index CFDs are directly hedged using the underlying futures contract but are quoted with a fair value adjustment ergo you'll have to trade in a size corresponding to a certain number of lots of the underlying... so for the FTSE 1 lot = £10 a point is the smallest size you could trade

 

[DT]

If you're in the UK and your trading isn't your sole source of income then I really see no point in going for CFD's over spread betting unless you like paying the extra capital gains tax and filling out your tax returns.

lower costs, better execution...

you've got to make those gains first and generally if you're trading frequently then costs are the important factor - sometimes even the difference between being profitable and not...

whether it is worthwhile depends on how you trade really - it isn't too difficult to calculate whether you'd have been better off retrospectively - though I guess things like re-quotes, slippage etc.. are another factor to consider too

 

[f2calv]

you can't open such a position AFAIK - the index CFDs are directly hedged using the underlying futures contract but are quoted with a fair value adjustment ergo you'll have to trade in a size corresponding to a certain number of lots of the underlying... so for the FTSE 1 lot = £10 a point is the smallest size you could trade

OK gotcha, that makes sense thanks.
I have traded standard IG lot sizes before ftse@£10/pt and dax@25EUR/pt - although I'm now appreciating their mini-lot instruments in the current volatility!
I'll give IB a call and just double check that information with them but it looks like that is where I'll be moving, as you say superior execution and lower costs is exactly what I'm looking for, along with a more robust API.

 

[Hittfeld]

you can't open such a position AFAIK - the index CFDs are directly hedged using the underlying futures contract but are quoted with a fair value adjustment ergo you'll have to trade in a size corresponding to a certain number of lots of the underlying... so for the FTSE 1 lot = £10 a point is the smallest size you could trade

I can`t agree: AFAIK the index CFD`s are sized 1 point per index unit. So for the DAX30 this means about 10000 x 1€ or multiples thereof as trade size.

Noice the Multiplier columb :

https://www.interactivebrokers.co.uk/en/index.php?f=commission&p=cfd2


Your minimum trade size for IBUK100 would be FTSE100 x 1 GBP.

Kind Regards

p.s. With GKFX or CMC even smaller sizes can be traded

 

[DT]

I can`t agree: AFAIK the index CFD`s are sized 1 point per index unit. So for the DAX30 this means about 10000 x 1€ or multiples thereof as trade size.

Noice the Multiplier columb :

https://www.interactivebrokers.co.uk/en/index.php?f=commission&p=cfd2


Your minimum trade size for IBUK100 would be FTSE100 x 1 GBP.

Kind Regards

p.s. With GKFX or CMC even smaller sizes can be traded

I'm not quite sure what you're trying to say - it doesn't really make sense - how would they create a order in the underlying futures market if you're not trading in full lots?