I decided to take a look at CFDs on T212.
As I’d expect from T212 it’s fairly easy to use once you’ve worked out the interface and where info etc is. However, too things have surprised me and interested to hear other people’s views of T212 CFDs.
Firstly the overnight (SWAP) interest seems to be massive and much more than I think other platforms (eg IG) charge. It seems to be about 0.1% per day thus really relegating it to the realms of day trading.
The second thing I noticed was the big variation in the minimum quantities. There seems to be no real logic behind it. For 3i its 10 shares which is roughly £200 whereas another company it might be 1 share at £5.
Are T212 simply not interested in CFDs (which is fair enough if that’s the case) or what? The SWAP values seem to make it extremely uncompetitive and I can’t understand the massive variation in min size other than lack of interest to manage it.
I really like T212 so just a bit puzzled because I think the other platforms are great and interested to hear other people’s views.
CFD has been the cash cow for many years, but T212 has been pushing through their invest side for a while now, and become a reputable broker. While the invest side is profitable in itself now, and is also much bigger, I don’t believe T212 has a real plan to abandon their CFD section either. It brings loads of cash, but they’d rather advertise invest (although I think i may have seen some CFD ad recently, but I might be mistaken).
Regarding pricing, from my knowledge T212 is the most expensive CFD dealer, and by far; but it is not a new phenomenon.
CFD is a rather unethical business, akin to unregulated (or barely so) casinos, and there has not been any regulations or oversight over their pricing.
Since CFD customer base is mostly unknowledgeable about financial matters, this complex fee structure is easily hidden, hence why T212, but also eToro, Plus500 and the likes get all the CFD clients, but IBKR (which is the cheapest by far) does not.
On a side note, the new regulatory framework from ca. 2019 pretty much halved revenues of CFD dealers by imposing strict limits on leverage; it is possible (but I simply do not know this) that some dealers may have risen their fees partly to compensate for this.
Other “solution” that some CFDs’ brokers have used, was creating an entity outside of the reach of the EU leverage limits legislation, in a foreign exotic country/jurisdiction. With clients registering and trading through that entities. (Sounds familiar with crypto trading and betting/gambling platforms avoiding legislation and regulation?)
I looked at the T212 CFDs more out of curiosity.
Putting aside all of the other issues, it is interesting that on the cfd platform you have live buy/sell pricing whereas on the ISA/Invest you have no idea what price a market order will execute at (or how long it will take to execute) and the whole interface for CFDs is far more interactive. Also T212 has a trailing stop loss on the CFDs. Normally I never use stop loses but I do like the idea of trailing stop loses in certain circumstances
Not enough order types, everything is too slow and cumbersome, (with the figures you need to see greyed out or behind the immovable pop-up order screen), and you cant do things on the screen, apart from move the (non trailng) stop loss, which doesn’t even show on the screen.
I watched a youtuber switch from a long cfd position to a short in a very small number of clicks, on a screen where you could see actual percentages (!) and a lot more stuff… He wouldn’t survive…