CFDs vs. Micros Eminis

[CaseyB]

Micro Eminis trade on centralized markets, so why trade CFDs when you can trade Micro Emini Futures?

Lots of traders buy and sell commodity Contracts for Difference, more popularly known as CFDs. And they typically believe that they are trading a “futures” equivalent. And why not? If the underlying futures go up on price, they make money. If the underlying falls, they experience loss. But the difference, large or small, is real. And so too are the consequences.

Let’s dispel the hype and get to the reality of the situation.

 

[Turveyd]

Micro Eminis trade on centralized markets, so why trade CFDs when you can trade Micro Emini Futures?

Lots of traders buy and sell commodity Contracts for Difference, more popularly known as CFDs. And they typically believe that they are trading a “futures” equivalent. And why not? If the underlying futures go up on price, they make money. If the underlying falls, they experience loss. But the difference, large or small, is real. And so too are the consequences.

Let’s dispel the hype and get to the reality of the situation.

No reason, Micro is new, CFD is dead quite rightly so.

 

[helpme_please]

Micro Eminis trade on centralized markets, so why trade CFDs when you can trade Micro Emini Futures?

Lots of traders buy and sell commodity Contracts for Difference, more popularly known as CFDs. And they typically believe that they are trading a “futures” equivalent. And why not? If the underlying futures go up on price, they make money. If the underlying falls, they experience loss. But the difference, large or small, is real. And so too are the consequences.

Let’s dispel the hype and get to the reality of the situation.

Futures are regulated and are more transparent. CFDs are not regulated, higher risk of getting screwed by brokers. Risk of getting screwed by CFD brokers is particularly high if brokers are on the opposite side of the trade and don't do enough hedging. CFD brokers using DMA (direct market access) model like Interactive Brokers makes me feel safer but still not as safe as regulated futures. With MicroFutures allowing retail investors to take small positions, I can't see what reason to use CFDs anymore.

 

[qlai]

Good article. I would also include that CFD broker knows your trading history (if you are dumb money). Also knows where your stops are. Same with Forex.