Trading spread on indices. How much?

[balusa]

Hi, I am considering opening a live CFD trading account with a company that provides indices as trading instruments along with FOREX and CFD stocks. Currently they charge 0.1% of the value of each index contract, 0.15% of stock (CFD) contract value and 0.04% of each forex contract. They also charge about 0.02% of overnights and there are no other charges apart from these ones. I wonder if the above charges can be considered acceptable for a trader to open a CFD trading account.
Thanks.
PS. I am currently participating in their free dukascopy.com trading contest

edited, chartman

 

[osho67]

Balusa

Sorry about my ignorance. But what is spread on indices?

 

[stevet]

balusa

your heading and comments dont really tie up - which company are you looking to use?

 

[balusa]

I would like to open a CFD trading account with Dukascopy Technologies Corp (www.dukascopy.com). For index trading they charge fixed commission of 0.1% of the value of each contract. They call this commission "spread" (I suppose that is how they interpret it). So I was wondering if 0.1% is the right commission for index contracts.

 

[stevet]

balusa

where are you based?

why did you alight on that company are is your post an advert for that company?

 

[balusa]

Absolutely not . I gave company details because I am having difficulties understanding their terms and conditions, so I think you will need to see them for yourselves before coming up with an educated judgement regarding their index trading policy (which is quite a rare thing by the way).

 

[stevet]

balusa

dont you think you would be better sticking with a company who you do understand?

i understand them - but you should stick to companies which have a history and are well known

 

[balusa]

Stevert,
No well-known companies that i know offer index trading+they all have unacceptably high commissions. Besides, I do not think it will be right to ask the company whether their spreads are the most competitive on the market. We all know their answer...

 

[balusa]

Anyway, any answers to my questions?

 

[stevet]

balusa

most companies offer index trading

but perhaps not on the basis of this company

but the simple answer then is - yes - their fee is way too high

and the fact that this company is an unknown source with no affiliation with any substantial financial entity may give you cause to think about their usefulness to you

who do you already use for your trading?

 

[balusa]

thanks, stevert
No, I am not trading with any company at present. Can you advise me the ones that offers competitive commissions on indices (Nasdaq and S&P are my favorites). Thanks again.

 

[stevet]

balusa

if you want to trade indicies - the best way is with futures brokers - i dont want to recomend anyone in particular but there is one who has a great deal for retail traders with a fee of less than $5 per round turn, and there are others who do charge more, but that will hold your hand a bit more

but for sure as you are starting out by the sound of it as you dont already have someone you are trading with - you might do best to trade with spreadbetting - and i dont do that so cannot recommend any of them - but again i am sure you will get some validations from others on here and then just check them out for yourself

 

[Naz]

If you really want to get down and trade some US indicies why not think about doing it without any spread and without any bias.Whilst getting filled in the blink of an eye with fantastic liquidity.Try the diamonds.Here is the screen,you'll notice there is no spread.

 

[Naz]

Here was a decent entry today,one that i posted live elsewhere.

 

[Naz]

Paying spreads and having spread betters bias can cost you up to 20 points.Trading the diamonds you can do the same trade and loose nothing in slippage.
Here's what happened today.

 

[Skimbleshanks]

That chart is INDU not DIA.

 

[Naz]

The DIA tracks the $INDU so its virtually the same chart.

 

[cloudbase]

Naz.

Using the Diamonds to trade the Dow is not something i had considered.
Can it only be traded through US direct access brokers and what
is the cost if you don't mind me asking.

thanks Steve

 

[Quercus]

Cloudbase
Just to let you know I sent you a PM!
Cheers
Q

 

[Naz]

Cloudbase,

The cost is based on whatever your brokers fee structure is and the amount of shares traded.It may vary from $1-$15.

Its a tracking stock with lots of liquidity and be traded from any broker that offers it.

All Nasdaq level 2 direct access traders just enter the code DIA on their screen and there it is.I run the Dow 30 chart in the background and if i see any entry i just type in the code and hit the ask.The fill is instant always.The liquidity is so good that its just a dream to manage your position.If i was a DOW trader its how i would trade the stock because of the money you save as against using a sb company.Its yet another edge a level 2 trader has.


Naz