re: placement in uk - king penguin King penguinYou pay a premium...

re: placement in uk - king penguin King penguin

You pay a premium of one tick (under $1.00 price) for a GSO (Guaranteed Stop Order). So if you bought say 100k HDR CFDs at 60 cents and you wanted to cover it with a GSO it would cost you $1,000. Its the same as paying 61 cents and its insurance. You can place it a minimum of 5% away from the market. So your loss is 5% plus the premium which in HDR's case is currently around 2% (1 cent on 60 cents say). If HDR gaps down you still get your GSO price. Its better than an ordinary stop loss order (no premium) which will give you the opening price when it gaps down (eg HDR at 60, opens on bad news at 45 - thats what you get).

I can sleep at night with GSO's and the margining gives you significant leverage to upside. Having said that CFDs with CMC or anyone else are not for everyone and are risky. They are the market makers (and would love to take your money!) and its virtual trading (you don't own the shares). I also have some real shareholdings in HDR which are long-term, but now I trade HDR with CFDs short-term.

Cheers

H