Listed CFDs

[genbie]

What do you guys think of these new instruments traded at the LSE? http://www.listedcfds.com Only 1 MM at the moment. Can anyone who has access to traditional CFD quotes for any of the equities published on the above site tell me if the listed CFD has been moving in the same magnitude like the traditional CFD over, say, the last week?

MMs had a bad reputation with the covered warrants market, but because in this case, there is no opportunity for them to manipulate crucial data like volatility that affected a warrant's price, these listed CFDs *may* not be that bad :-0

Thanks for any feedback.

 

[Mattybuoy]

I have no actual experience but would find it hard to believe that the spreads on these is going to be any better than you'd get from a normal CFD shop. The "Listed" part would appear to be largely meaningless, since it's still an OTC contract.

If the LSE was actually creating a proper marketplace for these (exchange-traded perpetual futures?) they might possibly be a good idea. As it is, I think (like Covered Warrants in general) they are just targeted at retail punters who don't realise that there are other types of account than the "standard" .

 

[apples10]

What do you guys think of these new instruments traded at the LSE? http://www.listedcfds.com Only 1 MM at the moment. Can anyone who has access to traditional CFD quotes for any of the equities published on the above site tell me if the listed CFD has been moving in the same magnitude like the traditional CFD over, say, the last week?

MMs had a bad reputation with the covered warrants market, but because in this case, there is no opportunity for them to manipulate crucial data like volatility that affected a warrant's price, these listed CFDs *may* not be that bad :-0

Thanks for any feedback.

They are interesting, but not sure who they are aimed at. People used to trading CFD's (like myself) will find it confusing that the 'price' of the CFD isn't the same as the stock itself and those looking for gearing (punters) would be better with Options.

Think they are just trying to get the buzzword (or ancronym) of CFD into a product that is still just basically a listed warrant.

 

[genbie]

Thanks very much MattyBuoy and apples10 for the replies.

I hope someone could spare 5 mins to compare the rise (or fall) of any of the listed CFDs with its ordinary CFD counterpart please. For example, the FTSE100 long listed CFD rose about 17.5% in the last two weeks when the underlying rose around 3.5%. Five times the profit without leverage. Was the ordinary CFD the same?

The pricing of listed CFDs is different because of the entry levels and included costs of daily financing.

To their credit, the LSE do handle complaints well IMHO. Their CW division were eager to have the issuers provide transparency and consistency in pricing. Maybe that's why there is almost only one MM (SG too) in CWs left?!

I think the alleged advantage of a guaranteed S/L is not very accurate since you can achieve the same thing with ordinary CFDs. They claim that the guaranteed S/L comes at no extra cost. Is it the same with ordinary CFDs or are the spreads much wider than normal?

One advantage is that it is easier for the small investor to trade these from their broker account, but that's just a convenience really...

Thanks.