I want to trade intermarket hedged positions aka spreads on midterm basis (holding position from days to weeks, no daytrading). For example: long Gold short Silver, long Gas short Oil, long SP500 short NASDAQ100 and so on. The issue is my country of residence is Russia so I can open account only in retail oriented broker firm, which does not provide margin discounts for spread trading. That is why I’m looking into CFD provider who supports many worldwide trading instruments (Financials, Metals, Interest rates, AGs, etc) and offer high leverage like 1:100. Trading outright with 1:100 leverage is one deal, trading hedged position is quite another. So I consider such leverage like analogue of margin discount. Who can recommend me solid CFD provider for these needs? Ideally I’m looking for provider who has CDF’s on major US stocks too, stocks from DOW30, top stocks of NASDAQ100, top ETFs. The goal is pair trading – for example long XOM short XLE, long MSFT short QQQQ and so on. But it is not hard requirement, primarily I need worldwide CDF’s.
You can check IC Markets, they should have all things you asked for. And for CFDs you can trade from very little positions (like 1 usd/point for index) to normal positions. But 1 thing that would be much worse with trading intermarket spreads using CFDs is bid/ask spread. For 2 legs you loosing a lot ... Example - if you have 3 ticks/pips spreads for CL and anther 2-3 ticks/pips for second instrument then on start you are in 5-6 tick loss. For index spreads it shouldn't be much problem - bid/ask spreads are rather tight for majors.
Thanks MichalTr for info, I will check IC. Execution cost of 6 ticks for oil vs gas should not destroy strategy however it's subject for testing. Thanks again.
I have international clients who get the exchange inter and intra market SPAN margin credits from the US futures clearing firms Advantage, Rosenthal Collins Group, RJ O'Brien, and other Chicago FCMs. Most fund their accounts with less than $50K USD. Do NOT use a discount brokerage, as their Risk Managers and Risk Systems are NOT configured for spread margin credits.
He PM'ed me asking for a public reply to this specific thread about what myself and my clients do in terms of clearing. So I answered his query making sure I stipulated that we were trading exchange recognized inter and intra market futures spreads. I wish him good luck finding a competent CFD broker. My sense is that holding CFD's for days or weeks will require him to borrow shares on the short legs and that requires capital. And the broker has practical and regulatory requirements to fulfill on short sales.
or if he wants to, he can just use MM type of CFD broker and doesn't need to deal with any of described things... And there are no special requirements, in fact opening that kind of account is even faster than normal futures account. He is from Russia, so he even doesn't need to care about ESMA regulations. He can use large leverage on legs as a alternative for spread margins and doesn't need to pay for data. Downsides are higher bid/ask spreads on both legs and no possibility to trade whole calendar curves (but from the question asked he is not interested in it). So let's not make very simple topic looks like it's complicated. Because it's not
I already did it. And I can recommend more of them But I'm also a fan of doing research "on your own hand". It's good to put some effort, even doing research he will learn something.