Questions on CFD

[Tenbinza]

Hi,
I have some questions on CFD. Does it apply for Stocks beside Gold and Silver? For dollar-cost averaging

For example, 1000 shares of OCBC at $8 dollars.
Using CFD, you buy 100 at leverage. But the downside is you will lose all money.


Which brokeage account to open for CFD?

Thanks

[accord]

Hi,

Yes, you may use CFD to trade Gold, Silver, oil, US stocks, etc...

You may like to find out more about CMC market (one of the CFD trading option).
They offer lowest commissioning up to 0.1%.
http://www.cmcmarkets.com.sg/cfd-trading
They also offer free CFD trading courses for members.


http://www.cmcmarkets.com.sg/cfd-trading/why-trade-us

[loh.bryan]

Hi Tenbinza,

To add on to Accord's posting,

You can use CFDs to get price exposure into most stocks. Do note that not every stock has a CFD equivalent as it will depend on what's being offered by the respective CFD brokers.

By "dollar-cost averaging", do you mean to do regular investments eg. S$200 per month to buy into eg. silver, gold and stocks?
If yes, this is possible via CFDs as you can buy fractions of a CFD or in your exact desired dollar amount eg. S$200. You will not be bounded by investing in standard 1,000 round-lot for Singapore exchange-traded shares or the minimum 10 Oz of silver with UOB silver saving account.

Yes, you could buy 25 or 100 units of OCBC with either some leverage or no leverage at all. For your OCBC buy example of gaining an exposure to 1,000 shares at S$8, the maximum amount that you could lose is entirely based on the total exposure to the market, which would be S$8,000 (1,000 x 8.00) for both leverage and no leverage if OCBC shares were to fall to S$0.

Leverage is a double-edged sword, it magnifies both your profits and losses, so please exercise caution when using it.


CMC Markets, IGmarkets, CityIndex and most local brokerage houses (Phillip Capital, KimEng, CIMB, etc) offer access to investing in CFDs. By far, CMC Markets is the popular one in this forum. On how to select a CFD broker, pls visit this useful url: http://www.bigfatpurse.com/2010/04/how- ... fd-broker/

Lastly, to find out more about CFDs investing, please tap the rich resources in this forum by doing a search eg "CFD" or "CMC" using the Search button located on the top right-hand corner of the screen.

Cheers!
Bryan

[Albert]

Please note that CFD is different from owning the shares. It give you the option of benefiting from the price movement of the assets it is tracking but not the right of voting like a shareholder.

Therefore, if you are using CMC to own the gold or silver, even u are using 0% leverage, you are only dealing with the provider such as CMC. So the catch is that if the provider is in trouble, so will your money. One recent example is the MF global. Therefore, it is important to open a account with established provider which has a local office in Singapore and is regulated by MAS. This allows you to have some form of protection. Those overseas platform will not have this form of protection. In addition, the Singapore company funds are geographically separated from their mother company. One example is the past AIG and AIA incident.

Hopes that helps. Any wrong info, please correct me.

Regards

[ilovecck]

Hi Tenbinza,

To add on to Accord's posting,

You can use CFDs to get price exposure into most stocks. Do note that not every stock has a CFD equivalent as it will depend on what's being offered by the respective CFD brokers.

By "dollar-cost averaging", do you mean to do regular investments eg. S$200 per month to buy into eg. silver, gold and stocks?
If yes, this is possible via CFDs as you can buy fractions of a CFD or in your exact desired dollar amount eg. S$200. You will not be bounded by investing in standard 1,000 round-lot for Singapore exchange-traded shares or the minimum 10 Oz of silver with UOB silver saving account.

Yes, you could buy 25 or 100 units of OCBC with either some leverage or no leverage at all. For your OCBC buy example of gaining an exposure to 1,000 shares at S$8, the maximum amount that you could lose is entirely based on the total exposure to the market, which would be S$8,000 (1,000 x 8.00) for both leverage and no leverage if OCBC shares were to fall to S$0.

Leverage is a double-edged sword, it magnifies both your profits and losses, so please exercise caution when using it.


CMC Markets, IGmarkets, CityIndex and most local brokerage houses (Phillip Capital, KimEng, CIMB, etc) offer access to investing in CFDs. By far, CMC Markets is the popular one in this forum. On how to select a CFD broker, pls visit this useful url: http://www.bigfatpurse.com/2010/04/how- ... fd-broker/

Lastly, to find out more about CFDs investing, please tap the rich resources in this forum by doing a search eg "CFD" or "CMC" using the Search button located on the top right-hand corner of the screen.

Cheers!
Bryan

And er just to add on to the add on, that is why it is of EXTREME importance to have a cut loss when u are using leveraging. And also, just my opninon, if u are holding to long term, ie investing, it is not advisable to leverage, however for trading, or buying/shorting for short term, it is ok to leverage.

[ilovecck]

Hi Tenbinza,

To add on to Accord's posting,

You can use CFDs to get price exposure into most stocks. Do note that not every stock has a CFD equivalent as it will depend on what's being offered by the respective CFD brokers.

By "dollar-cost averaging", do you mean to do regular investments eg. S$200 per month to buy into eg. silver, gold and stocks?
If yes, this is possible via CFDs as you can buy fractions of a CFD or in your exact desired dollar amount eg. S$200. You will not be bounded by investing in standard 1,000 round-lot for Singapore exchange-traded shares or the minimum 10 Oz of silver with UOB silver saving account.

Yes, you could buy 25 or 100 units of OCBC with either some leverage or no leverage at all. For your OCBC buy example of gaining an exposure to 1,000 shares at S$8, the maximum amount that you could lose is entirely based on the total exposure to the market, which would be S$8,000 (1,000 x 8.00) for both leverage and no leverage if OCBC shares were to fall to S$0.

Leverage is a double-edged sword, it magnifies both your profits and losses, so please exercise caution when using it.


CMC Markets, IGmarkets, CityIndex and most local brokerage houses (Phillip Capital, KimEng, CIMB, etc) offer access to investing in CFDs. By far, CMC Markets is the popular one in this forum. On how to select a CFD broker, pls visit this useful url: http://www.bigfatpurse.com/2010/04/how- ... fd-broker/

Lastly, to find out more about CFDs investing, please tap the rich resources in this forum by doing a search eg "CFD" or "CMC" using the Search button located on the top right-hand corner of the screen.

Cheers!
Bryan

Of course, it also depends how "long" is ur long term and how "short" is ur short term

And er just to add on to the add on, that is why it is of EXTREME importance to have a cut loss when u are using leveraging. And also, just my opninon, if u are holding to long term, ie investing, it is not advisable to leverage, however for trading, or buying/shorting for short term, it is ok to leverage.

[kolch]

Hi Dennis:

If I short a company stock via CMC markets, what happens later when:
(1) The stock is suspended?
(2) The stock price falls to zero?
(3) The company is bankrupt?

Thanks.

[Dennis Ng]

Hi,
I have some questions on CFD. Does it apply for Stocks beside Gold and Silver? For dollar-cost averaging

For example, 1000 shares of OCBC at $8 dollars.
Using CFD, you buy 100 at leverage. But the downside is you will lose all money.


Which brokeage account to open for CFD?

Thanks

CMC Markets allow you to choose the level of Leverage, it can be 0 to 90%, up to your preference, and the Leverage can be different for each transaction.

I think only CMC Markets allows this flexibility, if I'm not wrong. If you want to open an account with CMC Markets, our seminar graduates enjoy the privilege of only putting Deposit of S$2,000 instead of S$4,000 (for walk-in customers).

CMC Markets also allow you to invest a certain amount of money, eg. S$50 into OCBC, instead of min lot size of 1,000 shares. And they will just calculate based on the dollar amount (eg. S$50, how much percentage of units you can buy). So it really opens up a whole new world of Investment Opportunities for the retail investors, since the minimum investment amount can be as low as S$1 (yes, not a typo). So even if a person only has S$200 savings per month, can still diversify and split the S$200 to invest into eg. listed companies in Singapore, Stock index. eg. China Shanghai index, Dow Jones Industrial Average, Gold, Silver, even Oil (Crude Oil) etc, etc.

Thus, if you want to open CFD account with CMC Markets, just email me your name and mobile number and I get a staff from CMC Markets to contact you in order for you to enjoy this privilege they extend to our seminar graduates.