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April 13, 2016

Question:What are the trading conditions of Stock(shares) CFDs in LMFX MT4?

Answer:

LMFX offers Stock CFDs which are OTC derivatives.

You can trade them all through one trading account, so you are able to trade Forex currency pairs, Index CFDs, Stock CFDs, Precious Metals, Commodities and Energies in one account.

As already mentioned above, Stock CFDs are OTC derivatives so can make profit by the difference of prices in the market.

This means that you can even sell and make profit.

How to Stock CFD trading works?

Well, you can not start to sell stocks in the real stock market and make profit, because you can only buy the stocks and make profit if the market price goes higher than you expected.

But OTC derivatives like this Stock CFDs are possible option in this case.

OTC derivatives are consisted by two parties, but not any real markets.

OTC stands for Over-the-counter, this means that when you sell a Stock then the broker will buy the same stock and the same quantity.

So LMFX is always hedging your orders of all CFDs so you can make profit by the price difference in the market.

The price movement of Stock CFDs are exactly same as the ones in the real underlying market.

LMFX Official Website

Stock CFDs by LMFX

LMFX offers 15 stocks from NYSE, 11 stocks from NASDAQ and 10 stocks from LSE, so 36 stocks in total.

In terms of volatility, it is low comparing to other financial instruments.

You can even leverage your trading, so if you are trading major stock in the real stock market, you may want try out the Stock CFDs trading in LMFX.

Margin & Leverage

Despite of the leverage you have set in your trading account, you will be required fixed margin for trading Stock CFDs.

The margin requirement for Stock CFDs are 10%.

*20% for ALIBABA.

So the leverage would be 1:10 for Stock CFDs in this case. The leverage won’t be decreased or increased until further notification from LMFX.

LMFX Official Website

Spread and Trading commissions

There is an extra trading commissions charged for trading Stock CFDs, which are 0.1%.

This charge is for all Shares instruments offered by LMFX and you will also need to cover the spread.

The spread is variable depending on the market situation just like the underlying market.

Basically the price movement of Stock CFDs are mirrored from the real stock market.

Marker hours

Stock CFDs are not available 24 hours a day like a foreign exchange market, but it is available for trading only in very limited time.

Trading hours for U.S. Equity Markets(NYSE and NASDAQ) is from 16:31 to 22:55 (GMT+2) Monday to Friday.

Trading hours for London Stock Exchange(LSE) is from 10:01 to 18:25 (GMT+2) Monday to Friday.

Swap and Interest rates

All Stock CFDs are subject to over night swap charge.

The swap will be charged or credited in your account at 00:00 server time, and the process may take a few minutes so it is precisely by seconds.

The swap in this case, is dividend payment for share holders, so you will be credited the bonus/dividend if you hold a long positions, and you will be charged for the bonus/dividend if you hold a short positions over night.

Please note that the swap charge will be tripled just like other financial instruments on Wednesdays.

*Swap charged is tripled on Fridays for Index CFDs.

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