Hi Hollin,
Hi guys,
I was wondering if you guys could shed some light on this product offered by CFD and Spreadbetting providers.
I was wondering what does this actually track, i've been told FDAX i've been told the cash index... Does anyone know. Secondly, should this be something I'm trading or am I going to be giving money way to the CFD / SB provider?
Hi Hollin,
Spread betting (SB) firms tend to make up their own names for the instruments they list, so unless you reference the exact name and the provider who offers it, it's hard to say for sure. As a rule of thumb (although there may be exceptions that prove the rule), SB instruments that are based on the futures tend to have the word 'future' in the name, along with the month of expiry. If these are both absent, then the product is likely to be matched to the cash index and often contains the word 'daily' in the name.
For example, here are the instruments offered by ETX Capital. I've added the underlying instrument they're based on in bold parenthesis :
Germany 30 - Daily Rolling
(cash)
Germany 30 - June Daily Future
(future)
Germany 30 Fut - 19 June 15
(future)
Regarding your second question as to whether or not you should be trading any, all or none of them - only you can decide. If you haven't got a tried and tested methodology in place - then I'd say no. However, in those circumstances, I'd advise against trading
anything - regardless of the broker, market or instrument.
Tim.
