Zero commission - Short term trades wish comes true

[Sir Burr]

Re: Zero Commision. Short term trades wish comes true.

IB is a margin account...yep, you own them.

Thanks, there was some mention on the IB thread about your shares not being registered on Chess. I wasn't sure what that meant.

SB

 

[Sir Burr]

The platform is very basic and the orders are either buy/sell on stop or limit.

Thanks Glenn, no comparison to the TWS!

SB

 

[glenn_r]

In all fairness I had the follow up sales phone call today from Marketech and they said the real platform has a lot more conditional order features like max chase for example and as the platform is theirs they will consider adding other features if suggested by their clients.

 

[Sir Burr]

In all fairness I had the follow up sales phone call today from Marketech and they said the real platform has a lot more conditional order features like max chase for example and as the platform is theirs they will consider adding other features if suggested by their clients.

Thanks Glenn,

Sent an email and a reply back:

"Our platform provide you with 3 different types of conditional orders. They are OCO (order cancels order), If Done OCO and OCO Pair.
With our platform, we have limit order and also normal stop loss order which you can place over any ASX stocks with no charges."

SB

 

[woodrel]

I've played with the demo for a couple of days and it's OK. Good, simple market depth and charting with volume.
I like the fact that there is no interest payable on 100% margin stocks, so it's pretty good for those penny stock players. The price is certainly right.
Just watch out for point 5 on page 8 of the PDS.
It looks like there could be trouble if Marketech get into trouble. Not saying they will, but regular withdrawals would be wise.
I reckon I'm going to give them a go. Sick of paying $60+ round trip for my penny stock plays.

 

[onemore]

This is what I understand. Most PDD I have read as far as CFD'S all say ,they can use your funds in any way. If some segregated account blew up they can use your funds to prop it up. If they go bust for some reason you become a creditor and wait on the list.

NOT GOOD correct me if I'm wrong.

It generally takes a six pack to read the Product Disclosure Documents thoroughly.

 

[yonnie]

I wouldnt trust them with a lot of money, thats for sure.
at least with IB your cash is insured and you own the shares.

with those CFD`s its just a paper contract with Marketech and IF Marketech goes down, you not only lose your money but the value of your portfolio as well.

I reckon the risks in the share market are already high enough without adding worries from possibly defaulting brokers.

for me: no thank you.

BTW: the $0 brokerage is for top500 stocks only and not for penny stocks.

 

[tech/a]

Yes this is my only concern.
One of the reasons I have not been keen to trade CFD,s

You could of course trade the full leverage and keep your $$ safe on your side of the account! Rather have a margin call from them than me giving them one!

 

[Look Left]

Hi Sir Burr,
I was looking at your calculations and they didn't make complete sense. Could you please check my understanding.

Basically I've worked out (for my margin and # of trades/year). I use $100,000 margin with an interest of 9.5% = $9500 a year. On IB interest = $8075.

Brokerage (125 trades/year) on MT = $ZERO. On IB = $3500.

Total (brokerage and interest only)
MT = $9500
IB = $11575

So even with the higher interest rate MT is cheaper.
SB

With IB and a normal margin loan arrangement you only pay interest on the loan amount. So given $100,000 and using it to gain $200k of market exposure you only pay interest on $100k. As you calculated this is currently $8075, presuming 100% investment all year.

But with all CFD providers, the little villians hit you with interest on the total market exposure of $200k. This means an interest bill of $19,000. The only offset to this would be the interest earned on your cash not used as margin. Lets presume an average 30% margin requirement, including a few penny stocks, leaving you 40k of the 100k, not being used as margin. this produces about $1,400.

Summing up...
IB = $8075 Interest + $3500 Brokerage = $11,575
MT = 19,000 Interest - $1400 Interest + $0 Brokerage = $17,600

So it looks like a 50% jump in costs from IB to MT.
Correct?

 

[tech/a]

LL
I think your correct.
From what I gather many who trade shorter term 1 day to a few weeks have been put off CFD's because of this.
What looks cheap isnt!
Thanks for going to the effort of doing the calc.

 

[Sir Burr]

with all CFD providers, the little villians hit you with interest on the total market exposure of $200k.?

Wow! OK then my calcs are way out!

Cheers SB

 

[prawn_86]

many who trade shorter term 1 day to a few weeks have been put off CFD's because of this.

tech, if you dont hold a CFD overnight you are not charged interest. At least with the platform i use.

Possible way to increase 'day' trading leverage if anyone is interested.

 

[lbradman]

Zero Commisions!

nah no way this is too good to be true. I'm still trying to find some catch to this and have googled anything I could read on 'Marketech' and so far it seems good. I'm sure someones asked this already but 'HOW ON EARTH ARE THEY GONNA MAKE THEIR MONEY?'. Well theres noone here who has got any bad reviews of them I'll be happy to trial them out for my CFD trading. If they are as they say then its goodbye IG Markets.

 

[rub92me]

Zero Commisions!

nah no way this is too good to be true. I'm still trying to find some catch to this and have googled anything I could read on 'Marketech' and so far it seems good. I'm sure someones asked this already but 'HOW ON EARTH ARE THEY GONNA MAKE THEIR MONEY?'. Well theres noone here who has got any bad reviews of them I'll be happy to trial them out for my CFD trading. If they are as they say then its goodbye IG Markets.

CFD brokers make their money on the spreads and the interest. If that's no worse than other CFD providers then it may be worth a go.

 

[Look Left]

Hi Bradman,

'HOW ON EARTH ARE THEY GONNA MAKE THEIR MONEY?'

Obviously they wouldn't do this if they thought it wouldn't work on some level, so the bigger questions are how do they make money from you and is it better for you or them? The best way to find this out is by comparing Marketech against someone that does make money; like CMC, IG or your current provider. I'll use CMC because I'm more aware of their costs.

Scenario: $10,000 account, $3,000 used as margin to gain $30,000 exposure over 3 days.

CMC
Interest rate on 100% of exposure is RBA + 2% = 8.75%, Interest cost = $21.58
Commission = 0.1% of Exposure, Commission Cost = $30.00
Account balance is under $10,000 so no interest is received.

Total Cost = $51.58

Notes: You can't place a stop limit order to enter a trade. Most margins on top stocks are 10%.

MT
Interest rate on 100% of exposure is RBA + 3% = 9.75%, Interest cost = $24.04
Commission = 0 of Exposure, Commission Cost = $0.00
They don't pay interest on your account regardless of balance. This is a bonus for them.

Total Cost = $24.04

Notes: You can place a stop limit order to enter a trade. The margin rates are much higher, more in line with a traditional margin loan, which means you need much more cash to achieve the same exposure. Probably a good thing for 90% of traders.

In the end MT as a CFD provider looks quite good but you need to do the sums against your own provider. I've heard that MT customer service has been quite good in the past, hopefully this will continue.

 

[nizar]

Just found out Marketech has a "day traders levy".

Bit of a joke really.

If you open and close a position on the same day you pay 0.02% both ways.

If your positon is $400,000 ($40k at 10x leverage) then that's $80 per way.

So much for free brokerage.

 

[tech/a]

Yeh

You know Nizar if it looks to good to be true------

Really when your trading reasonable funds and getting good R/R fair trade cost .08% aint that bad.

Those holding % can just kill a short hold timeframe.

 

[CFD]

Yeh
~~
Really when your trading reasonable funds and getting good R/R fair trade cost .08% aint that bad.

I thought it was pretty good. You don't want them to go broke, just don't send us broke! I liked the sound of .05% comm (half of IG) and .5% off the interest rate margin.

So is anyone using/recommending MT?

 

[mayk]

It might sound stupid but I have to ask someone right Can I buy regular shares using MT? using 100% of my cash? The reason I ask is because if I have a 20K account with them I get free brokage and live free data? What else can I want?

I am not doing day trading and generally have investment oriented plan.

 

[Look Left]

Mayk,
With MT, if you buy a stock that they have listed as margined, ie <100%, then you must buy it as a CFD. So you will not pay brokerage on the top 500 stocks but will pay interest on the open position. This is how THEY make money.

On the stocks outside the top 500 you pay brokerage and interest.

On the stocks with 100% margin, you pay brokerage but no interest.

Be very careful about some providers such as Prudential. They will charge you interest on 100% margined stocks. This is day light robbery.

If you're interested in getting your brokerage costs down then look at Interactive Brokers, $6 or 0.08%, and the Live Data is optional. There's a good thread on this forum about them, search for postings by Steve_IB.

If you truly are an investor, not a trader, live data is not required. End Of Day data is good enough and available everywhere. But remember you get what you pay for.