warning to all cfd: margin traders, page-16

"how do the CFDs manage their risk? they don't always cover their positions in the underlying market so their systems have to be spot on"


The systems to run a book on a betting exchange are well understood, AP.

You can either,

1) offset the positions of two punters, who take opposite views on the direction of the market, in which case the bookie will cream the spread

2) if you take a large bet you can lay it off with another larger bookie, like the Sydney Futures Exchange.

The bookie will have additional chances to win by triggering the punters' stop loss bets.

How else can the CMC's of this world build a multi-billion company? Clearly, through the generosity of the punters. Just ask Tabcorp.

Is everything lost for the punters ? No. They can also get on Hotcopper and b1tch about ASIC and the ASX being toothless tigers.


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