CMC Markets – have you got any confidence in them...?

[BigBob]

BigBob, can I ask you what sort of risk management or position sizing strategies you use? Because it sounds like you had far too much leveraged on a counter-trend trade...

Well, I don't anymore... my trading days are over....

Anyway, at the time when my withdrawal request was not actioned I was trading with the trend with a short position on the DOW - I don't remember the size... I was not using a stop loss, basically because of the stop hunting as discussed above (be that by CMC or others). I don't know if you remember but the DOW turned and swung about 600 points in about the last hour of trading a couple of days after the Bernanke put, and that basically eroded too much of my free equity - I was at work and as a rule I don't mix trading with work and had deliberately no way of quickly exiting the position... I never quite recovered from that, as I from then on in was far too focused on getting back what I thought was rightfully mine - and my discipline slipped with the wrong focus...

[Steve]

Well, not really... it's not the potential for stop hunting that's got me posting here, it's more the inadequate systems CMC appear to have in place... manual processes in places where they are not needed cause mistakes and maybe point to systemic problems behind the scenes...

So should we be asking if anyone else has experienced a delay in having their withdrawal request processed?

As I mentioned earlier, I have never had any problems in getting my cash credited back to my bank account...

[BigBob]

So should we be asking if anyone else has experienced a delay in having their withdrawal request processed?

Well, imho that's not the only CMC process that is a bit strange....:

Why doesn't a credit card account top-up show in your account immediately - even the TAB can do that...

Why does the daily statement arrive at a more or less random time every day - you'd expect it to be the same, set time...

Why do they have manual intervention when processing trade orders - surely it would be better and quicker if it were computerised...

Maybe the owls are not what they seem....

[AMR]

Not saying it has anything to do with CMC, but other CFD providers are starting to raise margins. From the UK telegraph.
Brokers raise margins required to cover CFDs


By Richard Fletcher

Last Updated: 12:32am GMT 21/03/2008





A number of London's stockbrokers have followed the lead of MF Global and demanded that clients put up more cash to cover derivative positions.

The latest news and analysis from the banking and financial services sector Finspreads, City Index, IG Index and Saxo Bank have all informed clients that they plan to increase the "margin" required to cover contract for differences (CFDs) on banking and other stocks.
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CFDs are increasingly used by both private and professional investors. The derivatives allow investors to put up a small amount of money - typically 10pc - to obtain exposure to large shareholdings, a process known as leverage. MF Global clients had until yesterday to put up extra cash, transfer or close their positions after the broker raised the margin on some stocks from 10pc to 90pc.
Saxo Bank raised margins on all stocks to 50pc. Both City Index and IG Index increased margins on banking stocks to up to 10pc. An IG Index spokesman said the group planned to review all its margin requirements in the coming weeks.
Traders fear the increased margins demanded by CFD providers could raise market volatility as clients, unable to find the cash or transfer investments to other brokers, are forced to close positions.

[frostyboy]

does anyone have any experience buying guaranteed stops for nz shares from cmc?

say i wanted to short whs.nz at $6 and put a guaranteed stop loss in at 6.40 what would the cost be? how do they calculate it? is it 1% or do they give you quote for the stop? What is the normal range they quote etc? how long does a stop last for?

can you buy guaranteed stops for any shares? ones in take over play? or say you are long nzo.nz when they are drilling a big wild cat can you buy a stop 10% below current market price

[CJ]

My understanding is that GSL are 3% paid up front. Can only be done over the phone. I am not aware of any restrictions.

[AMR]

does anyone have any experience buying guaranteed stops for nz shares from cmc?

say i wanted to short whs.nz at $6 and put a guaranteed stop loss in at 6.40 what would the cost be? how do they calculate it? is it 1% or do they give you quote for the stop? What is the normal range they quote etc? how long does a stop last for?

can you buy guaranteed stops for any shares? ones in take over play? or say you are long nzo.nz when they are drilling a big wild cat can you buy a stop 10% below current market price

The closest you can place it is 5% away from the current price (so 630 for your warehouse example). I've used it a few times and generally it works as intended. It's at their discretion though.

[Steve]

meant to read : CFD users mostly lose money because they over extend themselves... over leverage themselves as is set up by thr provider yep! the leverage is geared to work for the provider. Always hold at least 30% cash.... for opportunity...

AA

Although, going by the theme of this thread, some find that it is preferable to over-leverage yourself with no cash backup, get stopped out and then blame the CFD provider for the position that you got yourself into...

It all comes down to risk management...ensure that you will always be able to fight another day.

[CJ]

Over leverage is an inherant risk but hothing to do with the provided.

The question is do they stop hunt as opposed to other customers stop hunt(ie. do they manipuate markets (since they are a market maker) or is is just other users doing it).

My question has always been with depth of market. If the market is very thin, then volitility is going to be bigger than the underlying market.

[Steve]

My question has always been with depth of market. If the market is very thin, then volitility is going to be bigger than the underlying market.

By default derivative markets are smaller than their underlying market, meaning that the volatility will always be greater.

You should understand that before entering such a market...