City Index launches Day Trades on Equities

City Index has today launched ‘Day Trades’, a new product which will give 50% reduced margins and 20% lower spreads compared to standard City Index Equities spread bet products on its 20 leading London Stock Exchange listed shares.

CityIndex (reviewed here) have explicitly stated that ‘Day Trades’ have been developed to appeal to day traders. It is a new spread betting product available to trade throughout the day from 08:00 and closes at market levels at 16:28 every trading day without the possibility to rollover the trade to the next day. Margins start at just 2.5% on leading equities such as BHP Billiton, BP, Tesco and Vodafone and from 3.75% on Anglo American, Antofagasta, Aviva, Rio Tinto, Vedanta Resources and Xstrata.

City Index Day Trading Markets

Joshua Raymond, Market Strategist at City Index, said: ‘Day Trades will provide a fast, reliable and value-added service to customers wishing to trade on an intra-day basis. The launch of Day Trades is a reflection of how we are increasing our range of products to cater for all client needs, whether they are long term, short term or day traders. We have found that day traders typically like to place multiple trades throughout the day and so by reducing our spreads and margin levels for specific day trade markets, we are reducing the typical trading costs a day trader would normally have to pay.’

Comments: No doubt such a product will appeal to hardcore gamblers but trading with a margin of 2.5% on a trade that expires within 24 hours (meaning that time works against you) is pure madness! Opening a CFD on 2.5% margin means each movement in the share price generates a 40 times bigger move on the capital. Remember that brokers have an interest to tell you the maximum amount they will lend you on your margin deposit while you should concerned with using the minimum level of borrowing to achieve your profit targets at a sensible risk level.

Tags: City Index, cityindex

This entry was posted on Wednesday, February 3rd, 2010 at 6:19 am and is filed under Broker News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.