Recommendation for CFD trading

[felixleong]

knnnnnnnnnnnnnnnnnnnnnn

i explain b4
http://forums.hardwarezone.com.sg/stocks-shares-indices-92/city-index-cfd-ig-market-cfd-3148044.html

DMA different leh...

 

[Asphodeli]

Market maker model cfd got no commission?? Can sic which one?

For cfd stock, there's dma mode and mm mode.

1) DMA = direct market access (lowest I know is 0.12%/min $12)
2) MM = market maker (lowest I know is $10/min $10)

Market maker mode has actually a lower commission due to them taking a spread from you whenever you buy and sell

For example if Singtel is Trading at $3.15/$3.16

For dma, you can issue a buy order at $3.15 and get executed at $3.15

For Mm, you can issue and only get executed a buy order at $3.15 provided the bid/ask is $3.14/$3.15

If dma has no transparency, then normal stock trading has no transparency le lah

City Index CFD for index and forex got low comms, I think 0.2%. For normal shares is typical rates, $15++

Sent from Sony D5833 using GAGT

 

[wahkao3]

Another hidden cost right under ppl's nose

CFD force u to pay financing charge even if you have the money.
they eat 3% financing charge. 3% is the average dividend you get.
imagine the stock suspended for 5 years.
enjoy paying 3% dividend for 5 years to your broker and there's nothing you can do to get out of it.

 

[killer]

Market maker model cfd got no commission?? Can sic which one?

For cfd stock, there's dma mode and mm mode.

1) DMA = direct market access (lowest I know is 0.12%/min $12)
2) MM = market maker (lowest I know is $10/min $10)

Market maker mode has actually a lower commission due to them taking a spread from you whenever you buy and sell

For example if Singtel is Trading at $3.15/$3.16

For dma, you can issue a buy order at $3.15 and get executed at $3.15

For Mm, you can issue and only get executed a buy order at $3.15 provided the bid/ask is $3.14/$3.15

If dma has no transparency, then normal stock trading has no transparency le lah

oops! my mistake. didn't realize trading stocks with cfd also have comms. i do cfd for commodities, indexes and forex and most brokers don't charge comms on those.

normal stock trading got transparency?? about the only things transparent are vol done and the price it done at. fake pending volume happens all the time.

maybe i misunderstand the word transparent. i apologized for that making a fool out of myself ain't i?

 

[Sinkie]

City Index CFD for index and forex got low comms, I think 0.2%. For normal shares is typical rates, $15++

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City index cfd shares is MM model

So far only igmarket is DMA CFD but 0.15% and $15, the rest of the FT cfd is MM

 

[wahkao3]

another factor of risk.

what if your broker requote? you signed T&C say u allow broker to requote. see the case of SAXO

 

[Sinkie]

another factor of risk.

what if your broker requote? you signed T&C say u allow broker to requote. see the case of SAXO

Market maker can requote but not direct market access cfd lah

 

[wahkao3]

dont bother with CFD. the market is already as risky as it is......
i dont need an extra layer of complexity to obscure things.

normal DMA is the best.

dont be hard up over CFD!

 

[wahkao3]

Market maker can requote but not direct market access cfd lah

direct CFD not so bad.

But Why bother with direct CFD? just go for DMA lah.
no need financing charge

 

[Asphodeli]

City index cfd shares is MM model

So far only igmarket is DMA CFD but 0.15% and $15, the rest of the FT cfd is MM

Yeah. I checked the charges, no comms on currency, index and sector CFDs, but they might put the comms in the spread.

For normal shares, it's 0.08%, with minimum charge of $10.

Sent from Sony D5833 using GAGT

 

[wahkao3]

Another hidden cost right under ppl's nose

CFD force u to pay financing charge even if you have the money.
they eat 3% financing charge. 3% is the average dividend you get.
imagine the stock suspended for 5 years.
enjoy paying 3% dividend for 5 years to your broker and there's nothing you can do to get out of it.

here is the financing charge most ppl over look

for those who are hard up over CFD, enjoy sharing your dividends with your broker

 

[wahkao3]

just dont bother with CFDs
these are complex instruments invented by the finance industry designed to suck money right under your nose with hidden charges, risks and conflict of interest

DMA is the best, your broker acts as an agent rather than a counter party. no conflict of interest

 

[felixleong]

btw as a former broker

I strongly advise retail customers to not trade with houses that charge no commission

because they usually profit elsewhere, like from the spread or financing which is very non-transparent ... the saying is, if you don't know your cost, you don't know your profits

best is to trade with houses with clear cut of commission and financing rates

I know of houses that for example u trade forex with no commission, they have a "moving" spread

example you are long on USD/EURO, you need to sell but the system will purposely give u a lousy bid price... sibei sianz one (sure jia u gao gao from the spread one, u pay 0.5% or higher also dunnoe sia)


i rather pay a fixed commission and get spot rates (real market prices)

 

[felixleong]

just dont bother with CFDs
these are complex instruments invented by the finance industry designed to suck money right under your nose with hidden charges, risks and conflict of interest

DMA is the best, your broker acts as an agent rather than a counter party. no conflict of interest

DMA got their own risk also... example U long kep corp then suddenly they decide on 10 for 1 stock split or any weird corporate action, you might be forced to get out of your position prematurely

 

[Sinkie]

Yeah. I checked the charges, no comms on currency, index and sector CFDs, but they might put the comms in the spread.

For normal shares, it's 0.08%, with minimum charge of $10.

Sent from Sony D5833 using GAGT

Bcos city index is market maker model and so commission is lower

0.08% + min $10 + a spread or whatever spread they quote you

So even if you see 50,000 on seller in sgx website, u can even buy up to 5,000,000 without affecting the market in a market maker model

 

[wahkao3]

DMA got their own risk also... example U long kep corp then suddenly they decide on 10 for 1 stock split or any weird corporate action, you might be forced to get out of your position prematurely

huh what? how come?
last time got bonus issue on UMS there isnt any force out of position
where u get such rule?
no such thing lah

 

[felixleong]

direct CFD not so bad.

But Why bother with direct CFD? just go for DMA lah.
no need financing charge

eh u noob then stfu la

do u even know what is DMA? DMA IS NOT A PRODUCT LA

there is not such thing as direct CFD u noob

DMA stands for direct market access...zzzzzzzzzzzz

CFD got 2 types

taken from wiki

CFD providers

CFDs are typically traded over-the-counter with a broker or market maker, known as a CFD provider. The CFD provider will define the contract terms, the margin rates and what underlying instruments it is willing to trade. They trade under two different models, which can have an impact on the price of the instrument traded:

Market maker (MM): this is the most common method, and is where the CFD provider makes the price for the CFD on underlying and takes all orders onto its own book. Most CFD providers will hedge these positions based on their own risk model, which may be as simple as buying or selling the underlying, but may also be via portfolio hedges or by consolidating client positions and offsetting one client long with another client short position. This does not affect the CFD trade as no matter what the CFD provider does with its own market risk, the contract is always between the trader and the CFD provider. The main impact is that price can be different from the underlying physical market as the CFD provider can for example take into account other client positions it is holding. This does allow the CFD provider to be very flexible in the products and trading times it offers as it allows them to easily create hybrids and hedge using alternative instruments for example to allow trading out of normal market hours. In practice, the market maker price usually matches the underlying instrument as the CFD provider would otherwise be exposed to arbitrageurs, but some CFD providers add an additional written guarantee in the contract that all CFD prices will match that of the underlying instrument.

Direct market access (DMA) was created in response to concerns that the price in the market-maker model may not match that of the underlying instrument. A DMA CFD provider guarantees that it will do a physical trade on the underlying market to match each CFD trade on a one-for-one basis. The contract is still between the traders and the CFD provider but through this method it is guaranteed that the CFD price is the same as the underlying price and that they will not be re-quoted. They will also be able to see their order in the underlying physical market order book. DMA only works where the underlying instrument can be readily bought and sold in the quantities that match the CFD and is most commonly used for shares CFDs. DMA CFDs can be more expensive as the CFD provider needs to cover the exchange transaction fees and may not be able get economies of scale by netting client orders together. The DMA model is much more like a traditional broker model and is preferred by professional and institutional traders as it avoids conflicts of interest with the CFD provider.


Contract for difference - Wikipedia, the free encyclopedia

 

[Sinkie]

DMA got their own risk also... example U long kep corp then suddenly they decide on 10 for 1 stock split or any weird corporate action, you might be forced to get out of your position prematurely

No, it won't happen de, don't worry

Like that digiland 500 to 1 consolidation, profit easily 5000% meh?

 

[felixleong]

No, it won't happen de, don't worry

Like that digiland 500 to 1 consolidation, profit easily 5000% meh?

no meh? i not too sure

I remember when I was doing account opening that time, they tell me if corporate action sometimes may need to close the position

but like normal dividends they just pay out as usual

 

[Asphodeli]

Bcos city index is market maker model and so commission is lower

0.08% + min $10 + a spread or whatever spread they quote you

So even if you see 50,000 on seller in sgx website, u can even buy up to 5,000,000 without affecting the market in a market maker model

Haha don't worry la I treat CFD trading as going to casino to gamble

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