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Clarity on CFD pricing

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WernerH
Contributor
Hi all... I am new to the CFD instrument and want some clarity on the pricing of CFD's. Looking at the Industrial index and derivatives i get the following prices. Index 26631, Satrix Buy 2653 (price to sell satrix shares at) Satrix Sell 2662 (price to buy satrix shares at) CFD MTM 2666 The question is, when buying and selling CFD's what price do i pay? Seems to be the MTM price when i buy? When i sell what price is it? And then to Simon, on your system what price do you use to calculate your 'loss risk' which you use to decide how many shares to buy? Help will be greatly appreciated. Werner
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4 REPLIES 4
StanleyB
Contributor
Suggest that you attend CFD course. MTM is value of CFD @ yesterdays close. When buying/selling CFD's only todays current price of underlying share or EFT is relevant. With STD you will pay 0.35% commission to buy or sell CFD's in addition to R50 brokerage. Be careful with CFD's on less liquid EFT's as the market makers spread in addition to the CFD spread can gobble up any profits.
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WernerH
Contributor
Thanks for the info. Read the booklet on CFD's and it answered my question as well. Did not think about the combination of the EFT spread in combination with the CFD spread. I did attend the course a short while ago, perhaps i need to go for a refresher. Thanks again. Werner
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WernerH
Contributor
JEEZ... EFT spread on STXFIN is in the region of 4.5% that is massive, add the CFD spread it is closer to 5%.Much lower on the INDI and RESI side. Very usefull to know. Thanks again. Werner
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StanleyB
Contributor
EFT spread on STXFIN is not quite that bad when marketmaker is active between 09:10 and 16:49 - look for large and usually equal bids and offers.
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