CFD trading - anyone playing?

Decadent_Fool

I'm testing the waters at the moment, and I like it - yes, I know the risks, and thank god for stops

Just wondered if anyone else is playing the game, and what their experiences have been?

cloud_dog

Played the spreadbetting game for a while (small amounts) and did ok but, when I got burnt, I got burnt quite badly.

Still have an account with MarketMaker where I place small bets and try to turn a profit - as the great line in My Cousin Vinney say's near the end "win some, loose some, hee, hee"

Decadent_Fool

Stop losses let you down or...?

cloud_dog

Was playing without a guaranteed stop/loss, silly I know but I was only playing with small amounts but that leverage really gets you

Decadent_Fool

Hey, these things happen, at least it wasn't catastrophic!

I've gone into this thinking that a guaranteed stop loss will be money well spent, and help me sleep at night Like you say, that leveraging is going to smart if it goes the wrong way

cepheus

A guaranteed stop loss will only pay off if the instrument gaps over the stop loss you would have set anyway. This can happen overnight but unless you are playing with big bucks it hardly matters, why not just take the loss. Stop losses themselves shouldn't cost anything. You don't get somat for nowt and you can be sure the broker will add enough spread to cover any chances of gapping and add a bit more for profit. As in most cases, insurance costs you more than it costs them and is rarely worth it.

cloud_dog

There is a difference between a stop/loss, which can be gapped over and a guaranteed stop/loss (hence the name).

A guarantee S/L does normally cost an extra couple of points, if the spread was two it is likely to be four with a GS/L.

I would advocate using a GS/L when playing with leveraged tools.

Decadent_Fool

Thanks both for the replies, and I'll be stop lossing during the day but any overnight positions will be gs/l to avoid gapping - I'll be leveraging a substantial amount and don't want to be burnt.

sabretoothtigger

cfd is less leveraged then sb I think so you could argue its more sensible for week long plays on price movements then owning the shares.

The guarantee stop loss would probably stop it being cheaper then buying the shares though but there is no guarantee stop loss on real shares afaik so its an advantage I guess

The markets are on a cliff top right now it seems to me.


Do dividends get credited to a cfd, what about rights, etc

Decadent_Fool

...I'll go short then :rotfl:

justpaper

I dont trade SB / CFD, its available on the platform i use, for some reason it just sounds more risky lol,

what broker do you use ?