You are wrong here. It depends on broker. Lets look for example on ES/MES: spread most of the time 0,25 to enter and exit the market + commission.
With my broker now i trade S&P 500 CFD with sread 0,14 (during US session) and 0,20 (Europe session) - no commission. So its much cheaper to trade CFD being in europe. And i get no slippage (as i trade with market maker), max position - up to 7500 CFD's, which is equivalent of 600 ES contracts for one mouse click. Margin is also always the same (day and overnight). And also no data fees
I think that cfd's are banned in US because CME, NYSE etc don't want competition...
But on the other side - there are too many scamers now, so we have to be carefull selecting a broker.
Nowadays a lot of reputable US brokers offer cfd's for their cliens outside of US - like Phillip Capital, InteractiveBrokers, etc
Alex
Can you help answer these questions from other members on futures io?
A trader I follow uses TD365.com to trade CFDs. Never any issues for him.i am thinking of opening an account as there are:
1. No commissions
2. No Exchange fees
3. Tight spreads
4. Widening of bid-ask during volatile times
If one can deposit money with them and be able to withdraw anytime without issues, seems attractive compared to futures.
I wouldn't normally be posting on a thread about CFD's -- since I don't trade them and never have -- except to point out that with CFD's you are trading with your broker as the party on the other side, and not with other traders on an exchange, and you should have a care about that. But the same is true for spot foreign exchange, so it's just a "let the buyer beware" situation, and everyone can make their own decisions.
Which is basically what I am going to say here as well, but in the case of the no-commissions and no-fees broker just mentioned, a person has to wonder just how the firm is going to make any money? Well, since they don't charge you anything up front, even though they supposedly have "tight spreads," they are going to take it out of the prices they offer the trader. Where else? It is coming from somewhere, and the trader is going to pay it.
If a trader understands that some money is going to be made by the broker from their trading, one way or another, then they can perhaps make an informed decision about what to do. But money will be made in order to provide traders with the trades, and it is important to understand this.
Just be careful of free things. There just never are any. There may be no commissions, but there is still no free lunch.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
The following user says Thank You to bobwest for this post:
The only real drawback to trading CFDs (or DFBs) is the spread the broker charges. Most brokers only charge 1pts spread so for swing trading or even day trading reasonable sized swings its not an issue. Scalping on CFDs would be impossible. In the UK for e.g. DFBs are tax free so can offer some good opportunities.
Only issue Ive experienced in the past is that during the volatility the broker randomly widens the spread - again this makes short term trading problematic
I was wondering which broker you use. I have a 0.4 point spread with S&P 500 CFD on IG Markets
Also, do you know any CFD providers that allow you to trade ES S&P 500 March Contract (or ES Mini Futures CFDs). IG Markets does but the spread is 0.6 points!
