Mar 19 2008
A couple of inaccuracies
I was sent a message by Robert who pointed out a couple of inaccuracies in my video, may thanks to you Robert for pointing this out to me.
Mainly to do with the interest component of Futures and CFD’s
When you purchase a futures contract you are NOT charged interest as an extra cost, you are only charged the brokerage fees (unless you purchase CFD futures). When I made the point about interest on futures I was hoping to explain that there is an interest component built in to the price, hence the higher prices for further out month contracts. I apologize to anyone if this confused you.
The interest costs charged on a CFD contract is calculated daily on a mark to market basis. In other words, at the end of the day you are charged interest on the size of the position at the time. Of course this has a two way effect, a smaller charger on a smaller position and so on, but it did need to be pointed out. Once again, my apologies.
Finally, it should also be noted that your broker will most likely also charge you a conversion cost at the end of each day to convert back to your native currency, however this can sometimes be negotiated. Do speak to your broker.
Many thanks to Robert for pointing those out to me
Dean
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