contracts for difference, page-66

re: real cost of dealing in cfd's ... remmi Hmmmmm Rembrandt

We all or at least most of us do already know that CMC group originated in the UK - what is your point.

And yes they do still offer commission free trading in the UK - again so what

Clearly they found that they could not operate under the same model in Australia it is not unsual for businesses to adapt their product and pricing depending on the market and country they are operating in. I am sure there are international brokage firms that charge different rates depending ion the country your account is in

As for the UK being tax free - this has nothing to do with CMC group or any other CFD provider but the difference in tax laws between countires


Now as for what you have stated the Real Costs


Long Interest charge now ... 7.5% - That is correct the interest is 7.5% p.a calculated daily. CFDs are not designed to be a Long or even medium term trading instrument, they are short term with trades being held intra day, overnight, a week maybe even a month so the only way to factor properly the interest cost is on a daily basis which is 0.0205% per day


Commission is 0.1% each way so 0.2% to enter and exist a trade - along way of your figure of 5%

Spreads - In the vast majority of cases the spread quoted on CFD matches the real market, the occassions it does not is mainly on thinly traded stocks or highly volitle stocks. Out of the 200 ASX stocks CFDs are currently offered on this maybe the case with 10 to 15 stocks and even then it is normally on 1 to 2 cents difference which equates to 0.02% on a $10 stock

Requotes - Others may have a different experience but I get requoted on less than 1 in 10 trades and again only 1 to 2 cents of the actual market so again 0.02% on a $10 dollar stock


SO THE REAL COST

0.2% brokerage
0.4% spread difference and requoting assuming these even happen
0.0205% intersest

The real cost therefore is much closer to 0.6205% for the first day and rising by 0.0205% each day the position is held open meaning the position would need to be held open for 700 plus days to cost 15%

I am in no way stating CMC group are pperfect or without fault and from what others have posted IG markets are better in the way of not requoting and better customer service compared to CMC's lower margin.

I looked at Macquaries site the other day but their margins are not attractive at all.

HAs anyone had any experience with MAN Financial