One Chicago SSF Busts

Discussion in 'Financial Futures' started by u130747, Nov 18, 2002.

  1. What happened with optionsXpress?
     
    #21     Nov 19, 2002
  2. The reason why SSF have failed on LIFFE is because in Europe they have CFDs (contracts for Difference), basically trading on 5 and 10-1 margin, with the liquidity coming straight from the cash market.

    Basically if I buy 10,000 Vodafone at £1.00 the CFD broker will trade for me on the cash quote, charge me say £2k in initial margin and loan me the rest, with of course variation margin to pay if need be.

    CFDs are pretty much a con because yes you get the leverage but then the commission is on the nominal amount. Say for example I buy 1 FTSE futures contract at 4000, nominal amount £40k with a commission of say £3 or 0.0075%. If I buy £40k of stock on a CFD, I'll likely be charged at best 0.1 or £40, and that's a big difference.
     
    #22     Nov 19, 2002
  3. nusrat

    nusrat

    If that was directed to me, the answer is, "Nothing, I'm still there."
    As I said, I'm not happy with my IB experience so far. So I only go there when I want to trade less than 10 (less than 8 for spreads).
     
    #23     Nov 19, 2002