Paying commission on CFD trades – Why is Zero Commission important to investors and where can you get it?
Experienced CFDs investors know all the tricks of the trade to maximise their trading profits. That includes keeping a close watch of market news, checking and re-checking their charts, and practicing risk management. But the key consideration that could completely undermine their efforts, lies in keeping a watchful eye on their trading costs.
What kind of fees would you incur when trading CFDs?
There are three main types of fees that investors are faced with when trading CFDs: Commissions, Spread, and Overnight Funding.
A CFD broker typically charges a commission – based on the size of the trade – both at the opening and the closing of the trade. Even smaller sized trades would incur a minimum commission that is priced based on the underlying asset.
A spread is the difference between the ask price that investors can buy, and the bid price that they can sell.
Wider spreads mean investors would need their trades to move more in order for it to be profitable, while narrower spreads mean investors’ trades can be profitable more quickly.
Overnight funding is a fee to keep your CFD positions open beyond a stipulated cut off timing, and applies to CFD trades with no expiry. It is an interest charge based on the cost of the leverage used for your trade.
Investors who do not hold their positions overnight would not incur overnight funding charges.
Zero commission when trading CFDs and other asset classes on MT5 with Phillip Futures
Now, leading regional brokerage Phillip Futures is offering investors the opportunity to trade CFDs with zero commission, when they trade on the Phillip MT5 platform. At present, the Phillip MT5 platform supports over 50 different shares CFDs, as well as various indices CFDs, commodities CFDs and cryptocurrency CFDs.
In fact, investors can also enjoy zero commission when they trade spot forex, spot gold and spot silver, as long as they trade on the Phillip MT5 platform.
Why is zero commission important to investors?
Here’s an example of how a zero commission trade can help investors to reduce their trading costs.
Investors Andrew and Bert both place a long CFD trade for 500 shares of DBS at the same time. Andrew places the trade with Phillip Futures who has a spread included in the prices but charges zero commission, while Bert places the trade with another CFD broker that charges commission. They both close the trade at the same time one hour later.
|DBS Bid Price||DBS Ask Price|
Here’s what happened with their trades.
|Broker||Phillip Futures||Regular CFD provider|
|Investor’s trading cost||$25||$35|
|Investor’s net profit||$475||$460|
With one single trade, an investor can net a higher profit of $15, simply by trading with a broker that offers zero commission. Over time, these savings can be quite substantial, making a difference to the success of your trading strategy.
Give your trading a boost with the Phillip MT5 trading platform
Phillip Future’s zero commission promotion is available for all trades – from CFDs to spot forex and spot gold – as long as they are made on the powerful multi-asset trading platform, MetaTrader 5 (or MT5).
At present, Phillip MT5 is the only MT5 platform available in Singapore that is fully supported by a reputable onshore brokerage and a 24/5 service support hotline. The Phillip MT5 platform offers very competitive spreads of as low as 0.6 pips, and is designed to help investors trade effectively using tools like Autochartist, Trading Central indicators, and Expert Advisors (or EAs).
Autochartist offers some of the most advanced pattern recognition tools available on the market. Its market scanner helps investors to monitor their watchlist, identify chart patterns, and display them on their charting panel in real time, while its risk calculator help investors determine their appropriate position size based on their risk profile.
Trading Central Indicators offer actionable insights like daily analyst views, real-time candlestick pattern recognition, and long & short entry or exit signals directly on investors’ charts.
The Expert Advisors (EAs) are trading robots that help investors monitor and trade multiple markets using algorithms, search for trading opportunities based on pre-set parameters, provide timely alerts. and open or close positions automatically.
Existing MT5 customers can start enjoying zero commission trading straightaway by adding the contracts into their account. If you are new to the Phillip MT5 platform, you can start by trying out the platform with a free demo account.
Need another reason to start trading on the Phillip MT5 platform?
From 1 Oct to 13 Nov, place any trade on Phillip MT5 and stand to win an Apple MacBook Pro, iPhone 11 Pro, and other attractive prizes! The more you trade, the higher your chances of winning! Find out more about the lucky draw here.