contracts for difference, page-32

re: contracts for difference aussie 200 v spi Pre-market each morning on Symex the SPI200 future is very thinly traded, with little depth, and the spread can be huge, therefore the apparent price visible, is a very poor indicator of where it will actually jump after 9.49am, when the major players enter looking for depth during the day session, after considering the imperative of various pressures evident overnight in foriegn markets, which they wish to risk manage with futures ....

The SPI200 can move greatly between 9.49am and 10.05am, when the ASX really gets underway.... During this period I doubt it is reacting to where the ASX will open, since this is unknown, more likely to the pressures generated overnight, for the large institutions risk positions. You will get killed if you attempt to play this interval as an amateur using tight stops thinking this relates closely to where the ASX200 may open.

These are just some of the huge risks, which incidently can take years to learn and price, that the CFD people do not explain to you with these products.

A similar highly volatile period of price auctioning and high volumes occurs nearing 4.30pm in the SPI200 future, before it goes to the thinly traded Symex for the night. The ASX has already ceased trading at 4pm, so is no longer moderating it.

I have had it suggested to me that various factors such as gain or loss in the close for the Dow 30, mining and commodity stock prices traded overseas, various spreads, and commodity index movements in the USA overnight, are just some of the factors which greatly affect the differing views taken by the larger players during the volatile high volume first minutes of price auctioning in the SPI. Which may or may not be true. It is not likely to be closely related to the ASX which has yet to open.

This is no place for non professionals. Some people believe that various futures instruments here in our thin markets may be heavily manipulated by institutions for there own purposes. Which may or may not be true.

Futures are used to a degree for risk management by institutions, and for other purposes, not to provide a smoothed carnival ride for naive CFD players. CFD playing related to futures movements exposes an amateur to far more risk than he or she imagines, especially overnight ,and during these volatile moments of price gyration at the beginning and close of each day.