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dealing share cfds

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when you are dealing share cfds at a certain price, 

its not like buying the actual shares so....

does this mean when you decide to open a position it will open straight away, 
unlike shares where you would have to wait for a seller to sell the shares to you?

so it would be possible to open a position on a share cfd at a million dollar worth of shares because you are not actually buying them???

 

im just first time on cfds and its been quite difficult to grasp its concepts

 

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@fried, you are more or less right in that you are not buying the underlying asset but a derivative of the underlying and the derivatives are far more liquid though bear in mind they are linked to the underlying and so will also sometimes suffer from illiquidity problems and therefore partial or non filled orders. Whether trading the underlying or the derivative there must still be someone to take the other side of the trade.

 

 

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@fried,

@Caseynotes has explained rather well. 

If you decide to open a position either 'Long' or 'Short' on a share CFD which is a mid cap to large cap as they generally are more liquid shares then your position should open straight away so the answer in this instance to your question would be yes. If it is a small cap to micro cap share where they are illiquid then I am not so sure as for some more liquid stocks it could still be yes but for many it may be no.

In terms of opening a position either 'Long' or 'Short' on a share for $1m via a CFD, I am not so sure. You will have to contact IG's dealing desk / customer services as to whether they would allow that. If you have 'professional status' and are a 'High Net Worth' (HNW) individual and can demonstrate where the funds are coming from and can satisfy certain requirements then IG may well consider it.

They would most likely not consider it for you as you clearly state in your post that you are struggling to grasp the concept of CFD's so even if you were a multi millionaire then I am not so sure that IG would allow you to open a position for $1m as unlikely that you a 'Professional Client' with IG. If my assessment is wrong or incorrect then please accept my apologies. 

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Posted (edited)
5 hours ago, Caseynotes said:

@fried, you are more or less right in that you are not buying the underlying asset but a derivative of the underlying and the derivatives are far more liquid though bear in mind they are linked to the underlying and so will also sometimes suffer from illiquidity problems and therefore partial or non filled orders. Whether trading the underlying or the derivative there must still be someone to take the other side of the trade.

 

 

then what are you trading in cfds if there were to be similar issues as shares and are you able to view these on a bid/ask quote window like in shares so that you can decide your entry points without your order being partially filled? 

Edited by fried

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@Caseynotes and @TrendFollower

I was pondering the Volume indicator on IGs platform, I assume this is this based on volume of CFD contracts/shares and not a reflection of the market? This seems to be the case with commodities, but when I see the volume of millions of shares I wonder if it is in fact based on the market?

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5 hours ago, fried said:

then what are you trading in cfds if there were to be similar issues as shares and are you able to view these on a bid/ask quote window like in shares so that you can decide your entry points without your order being partially filled? 

@fried  you are trading contracts for the difference in points between opening and closing the trade and that market is far larger than the underlying. You would need to be trading in very large size not to get filled in the cfd, futures or options markets, far more than trading directly in the underlying and your entry points should always be based on the trading plan whether fill, partial fill or no fill at all.

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2 hours ago, AbDXB1345 said:

I was pondering the Volume indicator on IGs platform, I assume this is this based on volume of CFD contracts/shares and not a reflection of the market? This seems to be the case with commodities, but when I see the volume of millions of shares I wonder if it is in fact based on the market?

Volume is a tricky one due to whether the asset is being traded on one exchange, multiple exchanges or no exchanges at all. See the answer given in the thread linked below (click arrow in header).

Also consider the the final volume count can come in very much latter than the actual bar close.

 

 

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