3356 UK CFD Text 20pp

Contracts for Difference
with deal4free.com
Risk Warning
Investing in derivatives and other leveraged instruments carries a high degree of risk
to the investor and due to fluctuations in valuation, the investor may not get back the
amount of their original investment, and in certain circumstances be liable to pay a
far greater sum. The inherent concept of Derivatives means they are not suitable for
all investors and CFDs are only offered by CMC to experienced traders who can be
classified as Intermediate Customers as defined by the Financial Services Authority.
It is advisable to seek independent financial advice if necessary. You should
remember that past performance is no guarantee of future performance.
CMC Group Plc is authorised and regulated by the Financial Services Authority.
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 1
Contents
Welcome
History
4
Who are deal4free.com?
What is a CFD?
5
CFDs explained
6-7
What are the benefits of CFD trading?
Trade long or short
Daily profit or loss
Tax
Margin
Finance
8-9
What types of CFDs do we offer?
Share CFDs
Index CFDs
Commodity CFDs
Treasury CFDs
10 reasons to trade CFDs
with deal4free.com
12
All trades are commission free
12
Tight dealing spreads
12
Over 1000 instruments offered across 18 global equity markets
12
Major Commodity and Treasury CFDs available
12
Indicative depth of market data
12
24 hour client support
12
Extremely competitive margins
13
Multiple online order types
14 -15 Award winning trading software
16
Integrated professional analytics suite
Key questions
Opening an account
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 2
Welcome to CMC
Established in 1989, CMC Group has
evolved into a world leader in real-time
Internet trading. After launching the
world’s first real-time Internet
Foreign Exchange trading platform
in 1996, we have continued to evolve
and now service clients in over 100
countries worldwide, offering them
real-time Internet trading in almost
3,000 products.
In the last financial year, 2003/2004,
we handled approximately 6.1 million
trades to the value of hundreds of
billions of dollars. With over 95% of
our business transacted over the
Internet through our straight through
processing system, we can keep our
costs to a minimum. This has meant
that we do not need to charge
commission to our clients and our
inter-bank dealing spreads are
extremely competitive.
The key to our success is our drive
and dedication to Internet trading.
We continue to develop our own
software using our in-house team of
experienced developers. Our award
winning Marketmaker® trading platform
processes each client’s trade within
seconds, updating their back office
and accounting details in real-time.
In addition the software’s real-time
position keeping function enables
clients to monitor their open positions,
keeping them informed of their margin
levels and profit and loss.
2 Welcome to CMC
Our live dealing prices are
simultaneously broadcast on our
Internet dealing system to all clients
at the same time. Clients just have
to click to trade.
So if we do not charge
commission, brokerage or
annual maintenance fees,
whilst also offering tight
dealing spreads, how do we
provide such a competitive,
cost efficient service?
Simple. By creating a successful
business based on three key areas
– software efficiency, being a market
maker and flows of business.
Firstly, by automating all trading
through our efficient Internet dealing
software we can substantially reduce
processing overheads. When a client
executes a trade, all the trade details
are immediately processed
electronically through to our back
office. With a real-time back office,
client accounts are automatically
kept up to date, with all margin calls
and trading capabilities calculated
and displayed electronically. Also,
during normal market conditions,
the software’s ‘auto-dealer’ will
electronically execute all trades
below a certain size against the
market price. This type of order
processing efficiency has allowed
us to pass the associated cost
savings directly back to our clients
in the form of competitive spreads
and no commissions.
Sec
mak
as t
inco
price
exch
cust
a co
As C
rem
cust
indu
dea
midd
Last
am
am
mak
gene
mak
thro
Then
the t
start
in th
Com
trad
cont
winn
Grou
realon 4
prou
the
wor
Pete
Chie
s
or
,
we
ve,
et
g
ce
ent
ails
ls
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 3
Secondly, brokers generally look to
make a commission on every deal,
as this is a major source of their
income. They will generally obtain a
price from a market maker, or an
exchange, quote the price to the
customer and charge the customer
a commission for executing the trade.
As CMC is a market maker we
remove this process by connecting
customers directly to our own
industry experienced and professional
dealers, thereby cutting out the
middleman and the associated costs.
Lastly, one major difference between
a market maker and a broker is that
a market maker may not attempt to
make a profit on every deal and
generally does not expect to. Market
makers look for flows of business
through continual quoting of prices.
Then as deals are picked up throughout
the trading day the market maker
starts to hedge the overall position
in the market.
Competitive prices, commission free
trading and a dedication to the
continual development of our award
winning software have all helped CMC
Group evolve into a world leader in
real-time Internet trading. With offices
on 4 continents in 4 time zones I am
proud to say that I believe we have
the best online trading service in the
world. I hope you agree.
Peter Cruddas
Chief Executive
Competitive prices,
commission free trading
and a dedication to the
continual development
of our award winning
software have all helped
CMC Group evolve into
a leader in real-time
Internet trading.
Welcome to CMC 3
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 4
Who are
deal4free.com?
W
Since its inception in 1989,
CMC Group’s (CMC) goal
was to remove the barrier of
high cost that previously
made institutional styled
trading inaccessible to the
retail investor.
CF
Co
deal4free.com is the brand name that
CMC Group Plc use for both their
CFD and Financial Spread Betting
product in the UK.
Originally, CMC was aware that when
trading with large financial institutions,
the retail customer often experienced
prohibitive trading costs due to
commission charges, account
management fees, wide trading
spreads and costly additional market
information. Our launch of the world’s
first online, real-time Foreign Exchange
trading platform in 1996 saw us
seize the opportunity to offer a service
designed specifically for the retail
financial market, a service that removed
the associated high cost of trading.
In January 2000 CMC launched its
commission free CFD product,
allowing retail customers the ability to
trade Shares, Indices, Commodities
and Treasuries online. Having already
offered a commission free Foreign
Exchange service since 1996, the
new commission free CFD product
once again proved our commitment to
offering an institutional, professional
style trading product at dramatically
reduced cost.
4 History
Following on from the success of the
CFD service, CMC launched a Financial
Spread Betting service in 2001 through
CMC Spreadbet Plc. With no
commissions or tax* to pay on profits or
trades, and a pricing structure that
more closely resembles the underlying
cash market than ever before, we
believe our Spread Betting service is
the pinnacle of our aim to reduce the
cost of trading the financial markets.
Including free award winning software,
real-time news feeds, streaming
pricing and free market analysis,
CMC strongly communicates our
desire to offer the most competitive
and innovative trading products
available within the global market
place. This commitment to offering
commission free trading has helped
CMC become one of the world’s
leading players in online trading,
attracting customers from over 100
countries worldwide, and transacting
an average of over 1 billion USD
dollars every day in the UK and
globally across all our product ranges.
1989
CMC Group Plc was established as
a Foreign Exchange market maker.
1996
World’s first online, real-time
Foreign Exchange trading platform
was launched.
2000
CMC launches the first commission
free CFD online trading service.
2001
CMC revolutionises the Financial
Spread Betting market with the
introduction of the Daily Rolling
Cash® bet. This unique product
allows CMC to offer some of the
tightest spreads in the market.
*Tax laws may change
AC
shar
of tr
phys
mar
your
diffe
your
man
phys
seek
Orig
cost
expo
com
reta
CMC
mak
wide
An e
inve
their
alter
as
er.
rm
sion
l
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 5
What is a CFD?
CFD means
Contract For Difference
A CFD mirrors the performance of a
share or index and offers the benefits
of trading shares without having to
physically own them. It is traded on
margin, and just like physical shares
your profit or loss is determined by the
difference between your buy price and
your sell price. However, CFDs offer
many benefits over and above
physical share trading. This brochure
seeks to explain these.
Originally used by large institutions to
cost effectively cover their equity
exposures, CFDs are now a
commonplace trading tool used by
retail investors around the world.
CMC Group is largely responsible for
making the advantages of CFDs
widely available to a retail audience.
An ever expanding number of retail
investors use CFDs both as part of
their trading portfolio and as an
alternative to physical share trading.
CMC Group is
largely responsible
for making the
advantages of
CFDs widely
available to a
retail audience.
CFDs 5
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 6
Benefits of CFDs
Trade long or short
Margin
You can take both long and short
CFD positions with equal ease. If you
go long of a CFD, you benefit from a
rise in the underlying reference share
price, and lose if the underlying
reference share price falls. Conversely,
if you take out a short CFD, you profit
from a fall in the underlying reference
share price, and lose if the underlying
reference share price rises.
You do not pay the full underlying
value of a CFD trade. However, before
you trade, you are required to deposit
collateral, known as ‘initial margin’.
Initial margin rates vary from stock to
stock. These are calculated as a
percentage of the overall value of the
trade, typically between 1% and 10%.
If all your trades are eligible for a 5%
margin, you can hold positions worth
a total of £100,000, having deposited
only £5,000. You would therefore gain
twenty times leverage on the collateral
provided. The full value of any running
losses must be met daily. This may
result in your being called for
additional funds to support a position.
This is known as ‘variation margin’.
Daily profit or loss
Every CFD in your account is revalued
at the close of each business day.
Any profits resulting from the
revaluations are credited to your
account. Losses are debited and any
resulting margin calls are made.
Tax
Under current UK tax legislation, CFDs
are not liable to UK Stamp Duty.
Stamp Duty is currently applied to UK
share purchases at 0.5%.
It is important to remember that
margin trading increases your
exposure to risk and losses can be
significantly higher than the funds
deposited.
How to calculate margin using a
share CFD example
• You wish to buy 3000 share CFDs at 150.00.
• The share CFD has a margin requirement
of 5%.
• 3000 x 150.00 = £4,500 (this is the value of
the position).
• £4,500 x 5% = £225
• To hold the position you are required to
deposit £225 as initial margin.
6 CFDs
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 7
Finance
If you carry a CFD position overnight, it will incur a financing cost. Finance will be
calculated on 100% of the value of the equivalent physical position. If you are long,
you’ll have to pay interest to CMC Group Plc; if you are short, you may receive
interest from CMC Group Plc.
How to calculate financing using a share CFD example
Long Position
Short Position
You wish to buy 3000 share CFDs at 150.00
You wish to sell 3000 share CFDs at 150.00
and decide to hold the position overnight.
and decide to hold the position overnight.
3000 x 150.00 = £4,500 – this is the value of
3000 x 150.00 = £4,500 (this is the value of
the position.
the position.)
You are then charged interest at the official
You are then credited an amount calculated by
overnight cash rate +3%. This is then
using the official cash rate less 3%. This is the
multiplied by your total market exposure and
multiplied by your total market exposure and
divided by 365 days in the year to give the
divided by 365 to determine the daily overnight
daily overnight rate.
rate paid to you.
• 4.58%* + 3%** = 7.58%
• 4.58%* - 3%** = 1.58%
• £4,500 x 7.58% = £341.10 / 365 = 0.93p
• £4,500 x 1.58% = £71.10 / 365 = 0.19p
• 0.93p will be debited from your account for
• 0.19p will be paid to you for every night you
every night you hold the position open.
hold the position open.
Although a typical broker would not charge
you financing, your outlay would be 100% of
the value of the trade (£4,500), which is
£4,275 more than you are required to hold the
CFD position with deal4free.com. By holding
this position with a broker you would lose out
on the interest you could earn on the capital
that the margined trade has freed up.
*Rates are based on the official cash rate. This rate is subject to daily market fluctuations.
**CMC reserve the right to amend this rate with prior notice.
CFDs 7
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 8
What types of CFDs
do we offer?
Share CFDs
Share CFD Trading; an example
Ind
Share CFDs are Contracts for
Difference, which mirror the price of
the share. Not only are equity CFDs
currently exempt from UK Stamp Duty,
they also give the user the ability to
short sell allowing possible profit
making from either a rising or falling
market. CMC’s share CFD clients can
trade over 1000 global shares on all
major markets from a single account.
The example below highlights how trading a CFD can dramatically reduce your dealing charges compared
An i
spec
inde
posi
glob
to conventional share trading. The example shows Vodafone trading at 142.00 / 142.25. You want to buy
3000 CFDs at 142.25 with the view the share price will rise.
deal4free.com
Traditional broker
Buy price
142.25
Buy price
142.25
Initial outlay
£213.37
Initial outlay
£4267.50
If you
you c
Price of Vodafone rises to 152/152.25
• You
Sell price
152p
Sell price
152p
Gross Profit/loss
£300
Gross Profit/loss
£300
Total commission charges
£0
Total commission charges
£30
ind
Stamp Duty
£0
Stamp Duty
£21.33
will
Financing cost
£0.89 (1 day)
Financing cost
£0
Net profit/loss
£299.11
Net profit/loss
£248.67
Return On Investment
140%
Return On Investment
7.03%
CFD
min
• You
1. The market price and the price of deal4free’s CFD is the same, hence both companies will allow you
mo
mu
los
to buy at 142.25.
2. If you buy the shares they will cost £142.25 per share multiplied by 3000, totalling £4267.50. Due
to the margined nature of a CFD you would only be required to deposit 5% of the trade size, hence
£213.37 is all that is required to buy 3000 Vodafone CFDs.
3. The market has risen 10 pence, multiplied by 3000 shares equal £300 gross profit on both accounts.
4. As CFDs with deal4free.com are commission free then there is no fee for the execution of the deal.
Through a conventional broker you would expect to pay commission, in our example this is £30.
5. Stamp Duty is charged on all share purchases at 0.5%. This is not applicable for CFD trades so in
the example above the CFD trader saves a further £21.33.
6. Financing has been incurred on a CFD trade; in the above example the trade has been rolled over
one night meaning a charge of .89p, which would not have to be paid if you own the shares.
7. Commissions and stamp duty have decreased the net profit on the share trade by £51.33 to
£248.67 whereas the only charge incurred trading the CFD was the small financing charge leading
to a net profit of £299.11.
8. Outlaying £4267.50 for a return of £248.67 is a 7.03% return on the investment. Trading a CFD
meant only outlaying £213.37 to earn £299.11, a 140% return on investment.
8 CFDs
C
b
a
s
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 9
Index CFDs
red
uy
An index CFD allows a trader to
speculate on the movement of an
index taking either a long or short
position. deal4free quote all major
global indices.
If you believe the UK stock market will rise,
you can buy the UK100 CFD contract:
• You Buy 5 CFD contracts at 4800. Each
CFD contract is worth £4,800 and requires a
minimum of 1% margin, £48. Each time the
index moves 1 index point, 1 CFD contract
will yield a profit or loss of £1.
Commodity CFDs
deal4free’s commodity CFD services
offer popular instruments to trade such
as Oil through to Pork Bellies, and are
available to trade across our award
winning trading platform. Unlike futures,
CFD trading allows you to access
commodities whilst accommodating
small contract sizes and reduced
margin requirements.
Treasury CFDs
The profit or loss that a client incurs can be
The profit or loss that a client incurs can
worked out by looking at the commodity’s
be worked out by looking at the treasury’s
‘tick value.’
‘tick value.’
• You buy 50 USCrude Dec CFDs at 50.00
• You buy 10TNOTE 10yr Dec CFDs at 112.50
CMC currently quote 17 Treasury
products including the T-Bond, T-Note,
Gilt and Eurobund. All treasury products
trade with a ‘tick value’ of 0.01.
• You sell your long position at 4750. A
movement of 50 points against you,
multiplied by 5 CFD contracts equals a
w you
loss of £250.
with a view the price will rise.
with a view the price will rise.
Due
nce
• You sell 50 USCrude Dec CFDs at 51.90 to
close your position.
ts.
eal.
• You sell 10TNOTE 10yr Dec CFDs at 112.00
to close your position.
The tick movement for this contract is 0.01,
The tick movement for this contract is 0.01,
you have made 190 ticks:
you have made 50 ticks:
51.90 –50.00 / 0.01 x 50 CFDs = $9,500 profit.
112.00 – 112.50 / 0.01 X 10 CFDs = $500 loss.
0.
in
er
ing
CFDs offer many
benefits over and
above physical
share trading.
CFDs 9
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 10
10
reasons to trade CFDs with
deal4free.com
10 Benefits
0
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 11
1
2
3
4
5
6
7
8
9
10
All trades are
commission free
Tight dealing spreads
Over 1000 instruments offered
across 18 global equity markets
Major Commodity and Treasury
CFDs available
Indicative depth of market data
24 hour client support
Extremely competitive margins
Multiple online order types
Award winning trading software
Integrated professional
analytics suite
Benefits 11
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 12
Which reason
will you choose?
8
1.
Risk
All trades are commission free
If you are an active trader, you will know that paying
commission can make a significant difference to your profit.
deal4free.com is the only CFD provider that does not make
a penny in commission, no matter how often you trade.
2.
Lim
A lim
a pr
whic
at w
you
you
trad
the c
Tight dealing spreads
We offer some of the tightest spreads in the CFD market,
which in conjunction with our commission free service
makes trading CFDs with deal4free.com one of the most
cost effective ways to trade the world’s financial markets.
3.
Over 1000 instruments offered across
18 global equity markets
We offer access to UK, European, US and Asian Shares
and Indices. When you open a deal4free.com account,
you can trade global shares and indices from one account
24 hours per day, 5 days a week.
4.
Major Commodity and
Treasury CFDs available
Our commission free CFDs don’t just stop at Shares and
Indices. You can also trade commodities including Gold, Oil
and Wheat as well as Treasury products such as the T-Bond.
5.
Exam
Indicative depth of market data
Indicative Level II ‘Depth of Market’ data is available on a
selected number of CFD Shares, enabling you to see the
CMC CFD order book, to gauge market sentiment and
observe market order flow.
6.
CFDs
BP w
order
Sto
24 hour client support
Even if you trade around the clock, you can be assured that
our support teams are on hand to help when needed. As
well as offering a 24 hour trading facility, deal4free.com offer
a dedicated 24 hour Helpdesk staffed by multi-skilled
representatives, ready to answer any of our clients software,
back office or payments questions. We also give access to
an online help facility to account holders.
7.
You h
Extremely competitive margins
deal4free.com offers some of the most competitive margins
available. Typically margins are 10% and below for
Shares and as low as 1% for Commodities, Treasuries
Indices and Sectors.
It is important to remember that margin trading
increases your exposure to risk and losses can be
significantly higher than the funds deposited.
Stop
your
part
mea
of a
you,
losse
As t
can
prev
mark
This
Exam
You h
CFDs
BP w
poten
1,000
loss s
Stand
to be
12 Benefits
hat
s
ffer
are,
to
ins
3356 UK CFD Text 20pp
2/3/05
5:34 pm
Page 13
8. Multiple online
order types
Risk is inherent to trading and CMC offers risk management facilities to enable traders to deal responsibly.
Limit order
Guaranteed Stop order
One Cancels Other order
A limit order allows you to predetermine
a price higher than the current price at
which you wish to sell or a level below
at which you wish to buy. This means
you can predefine the level at which
you want to take a profit or open a
trade at a more favourable rate than at
the current price of an instrument.
Trading CFDs with deal4free.com
allows you to limit your risk exposure
by offering a Guaranteed Stop-Loss
facility. This means that your position
will be closed at a level pre-selected
by you, in spite of dramatic market
movements. Guaranteed Stops carry
a small premium.
A One Cancels Other (OCO) order has
a number of advantages if you want
to get in and out of the market without
having to watch it constantly. It is the
combination of both a ‘limit’ and a
‘stop’ order and can be used to take
a profit if the market moves in your
favour or to limit losses if the market
moves against you.
Example of a Limit Order
Example of a Guaranteed Stop
You have bought a long position of 1,000 BP
You have bought a long position of 1,000 BP
Example of an OCO
CFDs at an opening price of 530.00. You believe
CFDs at an opening price of 530.00. You believe
GSK is trading at 1200.00, you have an open
BP will strengthen to 550.00. You place a ‘limit
BP will strengthen but want to be sure of your
long position which you opened at 1190.00.
order’ to sell 1,000 BP CFDs at 550.00.
maximum downside on the trade. You place a
You wish to exit your position (at a profit) if
guaranteed stop order to sell 1,000 BP CFDs at
the price rises to 1220.00 or if the market
Stop Loss order
520.00. The market begins trading lower and
moves against you, you want to be stopped
Stop Loss orders can be used to limit
your trading risk and are an essential
part of disciplined trading. Using stops
means you are automatically taken out
of a position if the market moves against
you, effectively limiting your loss. Stop
losses can also be used to lock in profit.
As the market moves in your favour you
can move your stop order with the
prevailing price, guaranteeing profit if the
market suddenly moves against you.
This is known as a trailing stop.
deals at 521.00, then gaps meaning the next
out at 1180.00. You would place a stop sell
available bid price you can sell at is 519.50. In
at 1180.00 and a limit sell at 1220.00 worked
the case of a standard stop the order would be
OCO. Whichever order is executed first, the
executed at 519.50, however because you have
other is automatically cancelled.
Example of a Stop Loss
You have bought a long position of 1,000 BP
guaranteed your stop loss, despite the gap in
the market, deal4free.com will execute the
order at 520.00.
If-Done order
An If-Done order is a combination of
two orders and is perfect if you are
unable to watch the market all the
time but want to participate in a
market move in your favour and/or
exit a move against you.
CFDs at an opening price of 530.00. You believe
BP will strengthen however, want to limit any
Example of an ‘If-Done’
potential loss and place a stop order to sell
GSK is trading 1200.00 and you wish to buy if
1,000 BP CFDs at 520.00, thus limiting your
the price falls to 1190.00 but exit if the price
loss should BP fall to 520.00 or below.
continues to fall to 1180.00. You would place an
order to buy GSK at 1190.00; if-done sell at
Standard stop and limit orders are not guaranteed
1180.00.
to be executed at the predefined level.
Benefits 13
3356 UK CFD Text 20pp
2/3/05
5:35 pm
Page 14
9. Award winning
trading software
Since its ground breaking introduction in 1996,
our Marketmaker® software has evolved into a
world leading financial trading platform. In 20032004 our customers executed over 6.1 million
trades online through Marketmaker®, a
testament to the strength and reliability of the
software. The software provides access to
thousands of real-time prices and gives you the
power to trade global markets from one account
24 hours a day.
Marketmaker® v5.0 functionalities at a glance:
Live real-time tradable prices on thousands of global
products including UK, US, European and Pacific rim
Equities, Commodities and Treasuries.
Multiple online order types including:
Market, Stop, Limits, OCO and Contingent or
If-Done orders.
14 Benefits
I
o
s
a
M
m
a
p
3356 UK CFD Text 20pp
2/3/05
5:35 pm
Page 15
ce:
al
Indicative Level II ‘Depth of Market’ data is available
on a selected number of CFD Shares, enabling you to
see the CMC CFD order book, gauge market sentiment
and observe market order flow.
Real-time position updates to help you track your
portfolio in real-time, allowing you to instantly see account
equity, view open, pending or closed orders and check
available margin.
Marketmaker ® v5.0 is CMC’s
most advanced, flexible
and comprehensive trading
platform to date.
Benefits 15
3356 UK CFD Text 20pp
2/3/05
5:35 pm
Page 16
10. Integrated professional
analytics suite
T
T
Q.
A. If
IDEAglobal FX analysis.
Reuters Company Fundamentals.
y
IDEAglobal is a valued source of market intelligence with an
11 year track record of offering insightful analysis on financial
markets 24 hours a day. Previously accessible only to
institutional trading desks throughout the world, IDEAglobal
is now dedicated to bringing deal4free.com customers
objective, independent research and actionable analysis.
For more than twenty years, Reuters Fundamentals (formerly
Multex Fundamentals) has been recognised as the premier
source of highest quality, client-focused financial information
on companies worldwide. Used by professionals in every
market segment, Reuter’s products provide unique insight
into a company’s health and performance, giving you a real
competitive edge.
o
Q.
A. T
s
y
Q.
A. N
p
Real-time Dow Jones news.
Founded in 1882 and now the leader in financial markets
news services, Dow Jones newswire has access to a
combined total of more than 3,650 reporters and editors
in more than 230 news bureaus around the globe.
Dow Jones is the world’s largest news-gathering network
and you can access it free of charge on the Marketmaker®
trading platform.
As part of our continued
drive to offer the most
comprehensive trading
platform in the market,
the Marketmaker ® v5.0
software also offers users
access to a number of
free trading tools.
16 Benefits
a
Pro Real-time charting and analytics.
To complement the trading capabilities of the Marketmaker®
software platform, deal4free.com has introduced a new
integrated real-time charting package. This new charting
tool includes 42 different indicators and overlays, the ability
to create your own indicators, a range of new charting
styles including Points, Histogram and Mountain, as well as
Market Highs, Lows and Open information. deal4free.com
has developed the new charting solution in conjunction with
IT-Finance, Europe’s leading provider of real-time interactive
technical analysis.
Q.
A. A
a
a
Q.
A. C
v
a
Q.
A. C
q
Q.
A. R
a
M
al
rly
n
l
ker®
lity
as
m
with
tive
3356 UK CFD Text 20pp
2/3/05
5:35 pm
Page 17
Trading CFDs
The key questions
Q.
What are the charges for trading?
A. If you trade on a regular basis you will know how commission rates eat away at
your profits. At deal4free.com every trade is commission free, no matter how
often you trade and no matter what your deal size is.
Q.
Will I have to pay Stamp Duty?
A. The 0.5% charged on share purchases does not apply to CFDs. As well as
saving commission by trading with deal4free.com, each time you trade a CFD
you save 0.5%.
Q.
Will I be trading on exchange prices?
A. No. As a market maker, CMC ultimately makes their own prices however these
prices are based on the underlying feed supplied by the exchange and
associated depth available.
Q.
What products can I trade from my account?
A. A CFD account with deal4free.com allows you to trade not just share CFDs but
also Index, Sector, Commodity and Treasury CFD. Foreign Exchange is also
available on the same account subject to experience requirements.
Q.
What types of orders can I place? Is there a charge?
A. CMC offers market, Stop, Limit, OCO and If-Done orders on the telephone and
via our Marketmaker® platform all without charge. Guaranteed stops are also
available but will incur a premium upon placing the order.
Q.
Will I earn interest on my account balance?
A. CMC will pay interest on account balances of free equity above the interest
qualification level or currency equivalent at a very competitive rate.
Q.
Will I have to pay for the software?
A. Real time trading software, charting, technical tools and additional market analysis
are all provided free to deal4free.com account holders via our award winning
Marketmaker® software.
Key questions 17
3356 UK CFD Text 20pp
2/3/05
5:35 pm
Page 18
5 easy steps to
opening an account
How to apply
1.
4.
Please complete the application form enclosed at the back of this brochure or
online at deal4free.com/cfd.
2.
Please sign and date the ‘Intermediate Customer Notice’ (ICN) twice.
Then forward them, marked for attention of sales, by fax to 020 7170 8498 or by
post in the freepost envelope provided.
Documentation
As CMC is a regulated firm we are obliged to carry out identification checks for
prospective clients.
3.
If you have lived at your current residential address for more than 3 years you
will not be required to forward any other supporting documents at this time.
If you have lived at your current residential address for less than 3 years you
are required to post the following supporting documents.
a. A recent original utility bill or bank statement (the original document which
will be returned upon request) and
b. A certified copy* of your Passport or Driving Licence as a proof of identity.
(Should you wish to forward original documents we would advise that you
do so via registered post. We shall endeavour to return them to you on the
day of receipt via registered post.)
*A copy signed/ stamped by a solicitor, accountant, bank manager or public notary as
being ‘a true copy of the original’.
These documents can also be included in the freepost envelope, which can
be found in the pocket at the back of this brochure.
Upon receipt of the above documentation and successful application approval you will
be forwarded a trading account number together with banking instructions for the
funding of your account.
If yo
plea
0800
5.
18 Opening an account
3356 UK CFD Text 20pp
4.
2/3/05
5:35 pm
Page 19
How to fund your account
To help make funding your account as simple as possible, CMC offers a
variety of ways to pay.
Online:
You can fund your account from your Marketmaker®
platform. Simply click on the $ sign to visit our secure
online payment page. Alternatively go to
www.deal4free.com/cfd and visit the “Fund
Account” section. Both debit cards and credit cards
are accepted. A minimum charge of 1.8% will be
levied against all credit card transactions dependant
upon the credit card issuer’s own charges.
Telephone:
Online is the quickest and easiest way to fund your
account, however if you are in a position where you
cannot access the internet, then please contact us
on +44 (0) 20 7170 8205 to pay via debit or credit
card. Please have your card to hand when contacting
us, as we will ask some security questions.
Cheque:
Please make cheques payable to “CMC Group Plc”,
write your CMC Account Number on the reverse and
post to:
CMC Group Plc, 66 Prescot Street, London E1 8HG
Please note it takes at least five working days from
receipt for cheques to clear.
Electronic Transfer:
Please visit the “Fund Account” section of the
deal4free.com website for the necessary details to
organise a bank transfer, or contact our Helpdesk on
+44 (0) 20 7170 8205.
If you have any queries in relation to our service or the account opening procedure,
please do not hesitate to contact sales on +44 (0) 20 7170 8201 or UK Freephone
08000 933 633.
5.
How to begin trading
Once we have received your completed application and funds, we will issue
you with the necessary software and details to commence trading, as well
as your personal log in details for our award winning platform Marketmaker®.
Opening an account 19
CMC Group Plc
66 Prescot Street
London
E1 8HG
United Kingdom
Freephone 0800 0933 633
T +44 (0)20 7170 8201
F +44 (0)20 7170 8498
E info@deal4free.com
www.deal4free.com
Registered Office as above. Registered in England No. 2589529.
Authorised and regulated by the Financial Services Authority.
PBCFDUK05v1