The Mechanics of Spreadbetting vs CFDs

[Davros]

Here are my experiences and thoughts about Spreadbetting.

I have come a long way over the last four years from investing to trading and have spent the last year "trading" with a traditional broker. Now my trading is more active I've decided to move to using CFDs but as a first step to understanding the mechanics and provide a more active trading record I've opened a Spreadbetting account.

I'll explain my style first - I have a full time job so do not want to trade in the day (in fact I prefer not to look at the markets during the day as it seriously effects my judgement). My system involves one hour a night selecting shares to buy/sell, I place the orders that night and adjust my current limits/stops. I have target prices to buy/sell at, so I wish to place these in advance.

My experience of spreadbetting:

• 
  80% of the time I can not place an out-of-hours order due the imposed price being too far from my ideal entry price. Sometimes this is 4% away from the close price
  
  I can not place "If-done" orders for pending orders. So automatic stops are out of the question
  
  Pending orders are often executed minutes after the level has been hit

My question is "Will a CFD account provide a better environment"?

Can I assume the execution will be better and I should be able to place out-of-hours orders without any limits.

Does anyone else trade ths way? I'm sure you are not all day traders or can hold down a full-time job and trade at the same time

 

[Davros]

I can not place "If-done" orders for pending orders. So automatic stops are out of the question

I realise this is possible for CFDs, it was a shock when the Spreadbetting company documented this feature in their user manual and then when I contacted them for the third time they told me it was only available for CFD accounts

It appears to me there is not a level playing field - I shouldn't be surprised.

 

[darrenf]

This is a problem I have been trying to get to grips with. I trade with cmc spreadbet who do not offer linked order facilities. However, I am led to beleive they do offer the facility on their fx accounts. (possibly cfd as well).

As I trade fx and the spread and price is virtually identical to the "real" fx rates, I wish to stick with sb for as long as possible.

The only solutiuon is to use cmc's alert facility. This can be set up to send an email (which can be forwarded to you rmobile) when your pending orders are executed. This way, you can set a stop order in the morning and when you get notification, you can call them and set a stop loss order. Not ideal I know, but like you say, the sb's do not offer a level playing field although that's how they market themselves.

I'm only just starting to use the alert facility myself but I know a few others have used this facility satisfactorily.

PS they offer 2 types of alert. price alerts and alerts linked to orders. So far I can only get the order alerts to work.