Ingot54
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Not much said on holding CFD trades over a long term, as most discussion is bent towards catching the short, fast moves.
What seems to have escaped traders is that a golden opportunity to make serious money is right under our noses. :idea:
The most common argument against holding a CFD position over the longer term, is the interest cost of holding.
My response: Rubbish!
Consider a position of 1000 BHP CFD's worth, say $30,000 grossed-up. You will pay cash rate plus 2% to 2.5%. Assume this is 8% pa which on $30k = $2400 pa = $6.67/day for a 360-day-year.
To get back your $6.67/day and break even, BHP would need to rise by less than ONE CENT PER DAY. (667 cents/1000).
Not difficult to find a strongly trending stock to do much better than that.
Over the past few months, BHP has risen by 50% notwithstanding the current market correction. This is one of those set-and-forget types of trades. CFD providers make their money by churning, and traders play right into their hands. The glamourising of active trading is coercive, and bordering on deception, in my view.
When you consider the reasons for trading, doesn't being glued to the screen all day, stressfully sweating it out on the action actually mitigate against "having a life?"
Do the maths. Get a life.![Cool :cool: :cool:](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
What seems to have escaped traders is that a golden opportunity to make serious money is right under our noses. :idea:
The most common argument against holding a CFD position over the longer term, is the interest cost of holding.
My response: Rubbish!
Consider a position of 1000 BHP CFD's worth, say $30,000 grossed-up. You will pay cash rate plus 2% to 2.5%. Assume this is 8% pa which on $30k = $2400 pa = $6.67/day for a 360-day-year.
To get back your $6.67/day and break even, BHP would need to rise by less than ONE CENT PER DAY. (667 cents/1000).
Not difficult to find a strongly trending stock to do much better than that.
Over the past few months, BHP has risen by 50% notwithstanding the current market correction. This is one of those set-and-forget types of trades. CFD providers make their money by churning, and traders play right into their hands. The glamourising of active trading is coercive, and bordering on deception, in my view.
When you consider the reasons for trading, doesn't being glued to the screen all day, stressfully sweating it out on the action actually mitigate against "having a life?"
Do the maths. Get a life.