contracts for difference, page-64

re: real cost of dealing in cfd's ... milesg rembrandt

I agree you can make money from CFDs but you don't have to enjoy the service provider or the costs!

Having said that ... the interest is comparable to Home Equity facility or Margin Lending so you can't use that against them. And the commission I pay using CMC is around 1% in and out .. so that's 2% .. higher than share trading (by around 1.5%) and some CFD providers yes. The spread.. say I'm buying a stock at $2.00 then its generally 1 cent (i.e you are forced to buy up at $2.01 often to get the volume without a requote which would be at $2.01 or more anyway).. so that's 0.5%.

So if you are borrowing to invest anyway the extra cost of CFDs in this case is around 2%. I reckon one decent trade where you make $5k will pay for that on an annual basis for a heap of CFD trades. So then all the potential profits with leverage is jam. And the costs are deductible anyway.

CFDs are excellent if you use them wisely.

H