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CFD transaction costs

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Not applicable
OST charges a flat rate of R50 brokerage, and 0.35% market maker spread. My question is, where is this spread fee reflected? It seems that the bid/ask on the CFD (albeit delayed) vs the underlying share is the same, so the costs do not appear to be shaded in?
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8 REPLIES 8
SimonPB
Valued Contributor
you trade at spot .. the cfd r50 and 0.35% is added over an above .. makes for a cleaner product to trade .. that said when we value the cfd's in our portfolio we remove the 0.35% from portfolio value ..
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Not applicable
Sorry, not understanding you correctly. I can see that the R50 is added as a cost when entering a trade, (at the bottom at total trade value) but the 0.35% is not reflected anywhere. Is it that the R50 is the minimum cost, and the 0.35% only kicks in if hte total value of comms is greater than R50?
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StanleyB
Contributor
The 0.35% buy and sell is additional spread when buying/ selling - example from report of actual trade 'Bought 10,000 DDTcfd @ CFD 1016c & U'Lying 1012c' was entered as 1012 on trading screen. You only see the R50 buy, R50 sell and interest costs on detailed P/L report.
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SimonPB
Valued Contributor
the R50 is over and above the 0.35% .. but I see what you say, comment below is correct but so is yurs .. let me dig around when I get back to the office later today ..
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Not applicable
Simon, is Stanley's observation correct? Because it is not exactly transparant then - when you enter a CFD trade, you don't get to see the live price, so I have to assume that the price i enter will only get triggered if someone accepts a live price that is my CFD entry less the comms?
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SimonPB
Valued Contributor
no you get the live spot price as your trade + comms .. so if a stock is offered at say 117 and you put in a buy at 117 ou will get at 117 + comms .. the point
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SimonPB
Valued Contributor
point is you trade at spot .. with other derivatives you trade at derived price, this way cleaner ..
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Wino
Super Contributor
The way I understand is that in the "Cost in R index" column, the cost per share is the cost at which your bid was succesful+0.35%. E.g Bought Sanlam at R24.00 + 0.84 = R24.84. This price is then reflected in the cost column and therefore the cost/contract.
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