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I'm evaluating FXCM as my next broker and first CFD one. Never tried before... but as I like to trade CL, the commision/spread is 5 points=50$ when with my actual future broker is 5$. How can be that big difference between commsions?
Can you help answer these questions from other members on NexusFi?
Becose CFD(contract for difference) are OTC instruments. This instruments arent traded on exchanges your counterparty is broker he sets the price and and CL Futures is A futures contract is a legal agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future. Futures contracts are standardized to facilitate trading on a futures exchange and, depending on the underlying asset being traded, detail the quality and quantity of the commodity.
tpredictor
North Carolina
Experience: Beginner
Platform: NinjaTrader, Tradestation
Trading: es
Posts: 644 since Nov 2011
Did you check during active trading hours? It might change, narrow, during the active session. Are you sure about your futures cost? You pay both the spread and commissions. 1 tick in CL is worth $10/tick. If you trade at market you will pay the spread and the commissions on top of that.
lemons
Tallinn, Estonia
Experience: Beginner
Platform: SC
Trading: NAS100
Posts: 959 since Nov 2010
2,5 ticks spread on active hours.
5 ticks per roundturn.
And yes correct if we "translate" it to futures contract CL its 50 $.
Tommip
Rybnik Polska
Posts: 114 since Aug 2015
Thanks Given: 18
Thanks Received: 51
Its even more then 5.With futures you can put your offer INSIDE spread while with cfd you cant.Example :
CL price is 52 /52.01
CFD 51.98/52.03
You can buy CL at 52 and sell at 52.01 and you make profit.If you buy cfd then you need to wait untill market will make... 6 ticks :-D.Then you will earn... 1 point .But this is case for all cfd brokers - best offer for cfd on CL was 3 points ...,5 is average for most of them
matthew28
United Kingdom
Elite_Member
Experience: Beginner
Platform: Bookmap
Broker: Stage 5, Rithmic
Trading: US Equity Index Futures
Posts: 1,250 since Sep 2013
Thanks Given: 3,500
Thanks Received: 2,532
Also, unlike a futures broker which just takes the commission for facilitating you being able to trade through the exchange, if you aren't paying a commission structure then it is probably a market making desk so they are taking the other side of the trade. Therefore without commission they need to get you and them in and out of the trade and have some room in the spread to make a profit.
On some FXCM products they had a Market Maker desk model where you payed no commission but had a larger variable spread (expanding during illiquid times contracting when the book is thick), and a non-Market Maker desk for those who wanted tight spreads and a fixed commission structure. I never looked at CFDs so I don't know whether that is available.
Note: I think FXCM called it NDD, their Non Dealing Desk model.
.But this is case for all cfd brokers - best offer for cfd on CL was 3 
