dimanche 17 janvier 2016

CFD Pricing - Any help?

Hello,

I am trying to find a broker that offers the same pricing formula that IG uses to calculate CFD pricing for commodities.

This is how they come up with the pricing

Quote:

How do we make our prices?

To price these markets we use two futures contracts on the underlying commodity. For each market we look at the contracts that have sufficient liquidity, then use the two with the nearest expiry dates.

The one that has the closest expiry date is called the front month contract, and is labelled ‘A’ in our diagram. The one with the second-nearest expiry date is called the back month contract and is labelled ‘B’.

As soon as the previous contract expires, the price we offer is equal to the price of ‘A’. When ‘A’ expires, ‘B’ becomes the front month contract, and our price is equal to the price of ‘B’.

In between these two expiry points, our price gradually moves from the price of ‘A’ towards the price of ‘B’. Depending on the commodity, the price of ‘B’ can be higher or lower than the price of ‘A’.
Click the image to open in full size.

(I still don't understand it completely)

My question is, are there any brokers out there that replicate the same pricing as what IG does but do not charge you for keeping position overnight and does not have an expiry? I don't mind paying extra spread and commission.


CFD Pricing - Any help?

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