Avoiding CFD financing costs overnight positions
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Apparently my questions stirred something, thanks for all responses. Keep it flowing 😉
But with regard to the initial question, it seems that in order to avoid costs, suggestions seem to complicate the scripting for this particular broker only. Isn’t there any other broker out there that has more favourable conditions where I can connect my algo’s to? Or maybe it’s better to enforce to be flat on friday evenings?
Cheers
Roger
…of course there are brokers with better conditions. I mean not necessarily that they have different rates, but they don’t have that enormous “admin fee” of 3% (or what ever it might be currently) which IG charges on top, just for “administration” of our overnight positions… I will not name any brokers in order to avoid “advertising”. anyway those brokers do not offer PRT as platform.
exit and re-enter positions which one intends according strategy to hold overnight I see as quite obvious lose-lose game (aside from coding effort). one avoids overnight costs, but loses for sure on spread (possibly exiting and re-entering multiple times, and possibly one has to pay much bigger spread than that of main trading hours when position was initially opened) and possibly one loses the overnight-moves on which one is in fact partially betting. and there are strategies which are successful only and only because they bet purely on over-night / over-weekend moves…
when developing trading systems I personally always check if it’s worth to hold positions a) over-night b) over-weekend, without considering overnight costs, just purely from strategy’s performance point of view. if benefit is positive but not significant on long term backtest, then I assume that benefit will be “eaten” up by overnight costs and not less important: keeping positions overnight means much higher general risk (gaps, no/low liquidity), unless one applies “guaranteed” stops (which 1. add to the cost 2. are affected by variable and unpredictable “minimum distances”). so, only keeping positions over-night/over-weekend if effect is positive and significant for particular strategy. “positive” might also mean different things: increasing profit and/or decreasing drawdown and/or reducing by a lot trading frequency (so possibly increasing significantly profit per trade). what is “significant” benefit one has of course to define/calculate/judge for him/herself.
cheers, justisan
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hi, so you really want me to show you how to find futures-cfd on IB? you go to instrument selection, select e.g. indices, here select e.g. Germany 40 and then you can select either “Cash” (“Kassa” in german platform version) or “Futures”, see pictures attached.
“Cash” are those usual cash-index cfd, and “Futures” are those futures-cfd. as you can see they they, like real futures, have expiration date, and also different price level from the cash. and you have such futures-cfd just for several equity indices, some commodities and bonds. in total by far not so many compared to usual cfd.
cash-cfd is what I trade, and futures-cfd is what I don’t trade.
if that were really your questions and I delivered answers needed, then you can send to me some piece of finest Edam cheese and few matjes. if I still did not understand your question/s, then I am giving up 😀
so, was my post a dream?
and would it be my dream to trade those futures cfd? today I think – rather not, but it is an alternative worth thinking about.
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Haha !
I am considering the cheese just because I like you to have some well known cheese, however, I would also send “drop” with it and as a good care taker you would eat that too.
So you better think twice ? 🙂 🙂Believe it or not, but it still took me 5 minutes to find what you showed. Point here is that I never (or hardly ever) use IG’s platform. I use PRT …
But after I yesterday for the xth time tried to find it within PRT without luck – and I looked in IG’s platform several times as well, I can now show you the problem :Picture #1 : This clearly shows what you show too. But I never look for DAX in there, as I use Nasdaq …
Picture #2 : This shows as clearly what I always find and see – all the same. Names are similarly built up as with DAX, but no Expiration Dates …
Picture#3 : The 100$ version, which I had on screen yesterday as well (for double-triple check because it was already the xth time I was looking for it) : Expiration Date “faked” (as in : does not exist for real – yes, at some stage I start to see ghosts).
So now – and I am doing this in ad-hoc fashion – knowing where to look because you showed :
Picture #4 : And there we are. 🙂 … 🙁I must now assume that PRT messes up with that expiration date. And look what I started writing yesterday (but skip because it is OffTopic – and the picture I refer to is not shown here) :
I tried to get (M)GC running without success. It is as if everything in there is wrong. It is hard to begin explaining … and maybe I just don’t understand !!
All starts with the data, shown below. This is from V12 which is additionally confusing because of the auto-selection of the XXXX/Full version. That is wrong to begin with, *or* it is coincidentally at a threshold today (March 30), of which I have seen from financial futures that V12 is wacky on that. Anyway, with GC and MCG I can’t make anything of it, and this is because other things are/seem wrong as well.
In the screenshot below you can see there is actually no data (or at least insufficient). Go back to a formally older contract, there is data but then there is no historical data (no XXXX, but e.g. 0424 which you see here too but which should be 0624 in reality).
So at least there too PRT messes up (or seems to).
There’s more funny coincidences going on : So the other day when I spoke with IG support, the nice guy on the phone told me the value of that contract I was complaining about with the overnight costs. He claimed 35K … the same as I see in IB so I know what he is talking about. But I claimed a 20th part of that because I use the EUR 1 contact …
euh …
Apparently he did not see that in my account. But he also did not KNOW where that huge amount of “costs” came from, so we both could only reason out that it had to be overnight costs. And instead of he telling that something had to be wrong, we said good bye and hung up.So Yes, justisan, I really wanted you to show me and you greatly did.
So you never used those futures and I can’t either. Why ? because my account is in euros; I guess I would pay even more on interest if I would be long on those USD instruments. It would work for the European futures though. Or … I might apply a trick maybe nobody has done yet : open a 2nd “sponsored” IG account slipstreamed with one of my other IB accounts and have that account in USD; what would hold back is to have yet another account …
Thank you !!
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