There was a very interesting article in yesterdays Fin reveiw re...

There was a very interesting article in yesterdays Fin reveiw re CFD's and how they work.

The article was comprehensive and stated a few points.

Some are:

Individuals can loose much more that just the 10% they put in. A CFD is a high risk tool for trading shares with little capital.

The CFD provider hedges himself against the stock proper by buying or selling the stock.

The provider can also short sell (something we cant do with APG) to assist with their hedging.

A CFD holder is not entitled to a vote on the particular stock he or she has purchased the CFD in.

In the case of large quantities of shares if needed an agreenent re voting power can be reached between the CFD holder and the provider. This is rare however was recently done in London where CFD'd were used to make a takeover of a company.

The article went on to say that the CFD provider protects himself the best way possible which would include large sell orders to supress the stock and large buy orders in the case of the CFD holder short selling.

CFD's are now and becomming more popular and a trading tool that is having quite an effect on the markets

The good thing is for APG is that with good news the stock will run hard and fast as people buy via cfd's and in turn the cfd company buys the stock.

On the flip side it can be a pain in the ass for a stock that is held in a trading range as part of the cfd providers hedging practices by puting buy and sell orders on at certain levels. The stock will break out of this "trading range" with increased volume and news.

I think with APG it was most noticeable when people bought APG cfd's at 18,19, and 20 then 43 bogus orders appeared at 20.5 keeping the stock from running to 25 plus. As we know the orders were cancelled when a complaint was lodges with the ASX.

To me that was a classic case of the CFD holders cutting their own throat and taking us with them. If they had bought the stock proper then the price would have acheived a far high price.

In the meantime while the volume is lower little trades pushing it down half a cent give the cfd provider a phycological advatage and for those that do not sit on their computers but use technology (mobiles etc) that gives them last sale it can give a misleading picture as far as what has really happened on the market at that particular time.

So...250 shares...may or may not be a CFD provider but certainly a possibility.