CFD Brokers with no minimum commission

[mpat89]

Hi, I'm currently spread betting on CMC and it seems apparent that using spread betting for my system is becoming an issue, even after I take spreads into account they seem to fluctuate a lot (I believe this is more common with CMC then other providers) and cause false entries. I opened a CFD account with CMC as I believed prices would match those of the underlying share, however, these seem to be slightly out too at times. I have a CFD account with City Index who's prices seem spot on. Only problem is I'm trading with an account size where the minimum commission of £15 would be too expensive.

Is there a provider who charges 8-10bps on UK shares and also NO minimum commission? CMC offer this but their prices are slightly out so I'd still have the same problem of false entries. Also their statements are rubbish for showing overall on position summaries as everything is shown daily with no overall summary per position which would be pretty annoying given CFD p/l's are taxable.
Help would be much appreciated!

 

[Weighbridge]

Hi,
I looked into this myself a while ago, but unfortunately it seems that most of the CFD providers charge a minimum commission. Their business is to act as an intermediary, so commission is most of their revenue and they need to protect it. This is in contrast to the spreadbetting firms, who make their money by bookmaking.

Still, you can reduce your costs a fair bit from £15 a ticket. You can certainly get 0.1% with a £10 minimum by shopping around. A few names that come to mind are IG Markets, GNI Touch and Etrade.

My solution to getting whacked by the minimum commission was just to deal in sufficient size, i.e. a position of at least £10k. Not the answer you were hoping for I know, and it can still be inefficient if you scale out of a position in chunks. Nonetheless, I find it more efficient than spreadbetting overall.

I'm not familiar with CMC's CFD product, so I can only guess at why their risk price differs from the underlying bid/ask. Maybe it's because there isn't enough size available at the best bid/ask, so CMC widen the spread a bit?

Personally I deal CFDs using Direct Market Access, so my transactions are immediately mirrored in the underlying. For all intents and purposes it's like trading directly on the exchange, using level 2 data. There's no scope for the broker to fiddle the prices.

DMA trading is undoubtedly more complex than quote-driven trading, but I've found it has helped my edge. Apart from anything else it allows me to deal inside the spread, which mitigates the cost of commission.

Best of luck.

 

[mpat89]

I guess I have no choice but to keep looking and do so well that my account size justifies it! thanks for your reply

 

[dodge149]

Just look for a firm that offers DMA, with a similar commission system to CMC Markets. There are hundreds of firms out there and im sure some will offer exactly what you want. There is obviously a market for people who trade small amounts, and so firms cater for that.

 

[dodge149]

try this lot... they say they will discuss a commission package to suit your trading activity: CFD Fees & Charges

 

[dodge149]

and this link will give you a comparison
CFD Provider And Broker Comparison UK

 

[tan5ki]

PartyMarkets don't charge minimum comms on CFDs but then I don't believe they have DMA either. Could be worth a look??

 

[luckystrike23]

IG Markets, CMC and GFT compared here

http://www.contracts-for-difference.com/compare-brokers.html