Going wildly off-topic, and if it matters, this version is 40+ years old: A snail is at the bottom of a well 30 feet deep. It can crawl upward 3 feet in one day, but at night it slips back two feet. How long does it take the snail to crawl out of the well?
No, you can't do basic math. 3-2 =1. So in 1 min, it made it up 1 foot. Since within the 1st min it went up 3 feet before falling back 2 feet and then that min is over. The min is exactly 60 secs and the sheep completes all actions within that min.
Now, there a wolf which has seen the sheep. But the wolf is taking a piss. He will finish the piss in 1 min. The wolf travels 1/2 foot within 1 min and is at the bottom of the mountain. The sheep is not fucked unless the wolf gets to it before it reaches the top of the mountain. The are also pebbles that fall down the mountain that travel at 2 feet per min and may strike the feet of the wolf and/or the sheep.
You're an absolute f*cking moron if you thought my answer was anything beyond satire. 3 - 2 = 1. Thank you for the profound inquisition.
Your welcome, it's good that this free advice has helped show you if you are right for trading, as we can see not everyone is.
I will later on post the answer to this question if no one gets it. It's a real question that if you get it right can help land you an interview for a salaried position at a large company. When you take the test, you are watched by a live person through the camera on your laptop to make sure you don't cheat.
DMA CFD brokers like IB (and there are European ones too) send orders to the market and have the same spreads as the underlying, you simply gain better leverage and depending on your style, cheaper commissions. You don't even need to be under-capitalized as extra leverage is always useful if you know what to do with it.
hmm it depends on which market as some of the cfd's have too wide a spread which can kill the edge which gives Jtrader33's point above some validity. Bc I usually execute limit orders, I calculate the bid/ask relative to the tax savings, and leave order levels accordingly. but even in fast markets, the vendor can choose to widen the quote which means you may or may not get filled. statistically, especially if you are under European tax jurisdiction, there is clearly a tax benefit but not if you are in the US. it also depends on market volatility, if you have a strategy that tends to trade through your price more times than not and you deal with being offside before making money, then you should get your limit filled regardless. for liquid markets like fx, oil, gold, some shares - go cfd all day. but for the illiquid ones, you have to be careful bc you may in fact be pissing away your edge as per what was previously stated earlier. each trader has to define their trader and tax payoff accordingly. I ultimately believe, that if you can get the tax benefit and the vendor offers the product that you intend to trade, bc it may not even quote the product, then you should definitely take advantage.
if you are an experienced trader, which it sounds like you are, perhaps you can answer the original question to add value to the person seeking help? what I did was answer the question and gave a practical example to put my answer into context. It is unclear to me what you are trying to achieve with the above questions, so please feel free to clarify if you wish.