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  1. #1
    guyj is offline Member
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    Sep 2011
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    question regarding spx500

    Hi,
    as I noticed we can trade the S&P500 index as we trading with the currencies.
    I have a question regarding the SPX500.
    the stock market is open from 9:30 to 16:00, so how we have 24 hours data for SPX500 and not only on the stock market open hours?

    Thanks,
    Guy

  2. #2
    Rob at FXCM's Avatar
    Rob at FXCM is offline DailyFX Administrator
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    Apr 2010
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    Hi guyj,

    Thank you for your post! Allow me to answer your question!


    If the stock market is open from 9:30 to 16:00, how is the CFD product SPX500 available almost 24 hours a day?

    Excellent question! CFD prices, like SPX500 for example, are derived from the underlying index or spot product. For FXCM Ltd. Index CFD products, the quoted price is based on the relevant futures price minus a commonly used Fair Value. For Commodity CFD products, the price is based on the relevant futures price.


    What is Fair Value?

    Fair Value is a calculation that factors various things that tend to affect the price of a stock index futures contract, such as interest and dividends. A Fair Value Rate adjustment is often applied by many media outlets when quoting market index prices based on futures contracts.


    Where can I find more information on CFD's that are tradable through FXCM?

    For more information, check out our CFD Product Guide. Also, feel free to reply on the forum with any other questions you may have or email me directly at rob@fxcm.com.


    More than happy to help!

    Rob

    Quote Originally Posted by guyj View Post
    Hi,
    as I noticed we can trade the S&P500 index as we trading with the currencies.
    I have a question regarding the SPX500.
    the stock market is open from 9:30 to 16:00, so how we have 24 hours data for SPX500 and not only on the stock market open hours?

    Thanks,
    Guy
    Add your post to join the conversation or contact me directly at rob@fxcm.com!

  3. #3
    guyj is offline Member
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    Sep 2011
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    Hi Rob,
    Thanks for your answer, it is still not very clear for me,
    you mean that the price of the CFD product such as SPX500 is not the exact price of the index?
    or it is the same price in the open hours and have additional prices on the closed market hours?

    Thanks,
    Guy

  4. #4
    Rob at FXCM's Avatar
    Rob at FXCM is offline DailyFX Administrator
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    Hi guyj,

    You are correct. It is a combination of the two. When the instrument is trading in the cash market, the prices come from there. But when the cash market is closed, prices follow the futures market.

    Rob

    Quote Originally Posted by guyj View Post
    Hi Rob,
    Thanks for your answer, it is still not very clear for me,
    you mean that the price of the CFD product such as SPX500 is not the exact price of the index?
    or it is the same price in the open hours and have additional prices on the closed market hours?

    Thanks,
    Guy
    Add your post to join the conversation or contact me directly at rob@fxcm.com!

  5. #5
    guyj is offline Member
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    Sep 2011
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    10
    Hi Rob,

    Thanks for the answer.

    if we have the future prices during the closed hours and the real prices on the open hours,
    how we dont have big gaps betwean the time of the changing prices from closed hours to open hours?

    Thanks,
    Guy
    Last edited by guyj; 10-09-2011 at 05:43 AM.

  6. #6
    Rob at FXCM's Avatar
    Rob at FXCM is offline DailyFX Administrator
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    No problem guyj!

    How come there are not CFD price gaps when pricing switches from being based off cash prices to future prices?

    The reason you do not see massive gaps in pricing when cash price moves to futures price is because a Fair Value Rate adjustment is applied when quoting market index prices based on futures contracts. Once the cash market re-opens, it then looks at that live price. The price usually will not gap, but typically you could see spreads widening a bit when the prices are based on futures rates with a Fair Value Rate adjustment rather than the cash price. Typically the tightest spreads are seen when the instrument is open in the cash market.

    I appreciate your questions! Let me know if there is anything else I can assist you with!

    Rob
    rob@fxcm.com


    Quote Originally Posted by guyj View Post
    Hi Rob,

    Thanks for the answer.

    if we have the future prices during the closed hours and the real prices on the open hours,
    how we dont have big gaps betwean the time of the changing prices from closed hours to open hours?

    Thanks,
    Guy
    Add your post to join the conversation or contact me directly at rob@fxcm.com!

  7. #7
    laurentius's Avatar
    laurentius is offline Member
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    Mar 2009
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    78

    CFD's data providers

    Thank you for all the good answers on the SPX500 Rob.

    Could you please say something about how price feed delivery works with the CFD's? Like who is giving FXCM the data on the SPX500? And are there any regulatory control with CFD's, or can for example the SPX500 have many relatively different value levels with different brokers?

    Thanks,
    Laurentius
    “Those who say it can't be done are usually interrupted by others doing it.” - James Arthur Baldwin

  8. #8
    Rob at FXCM's Avatar
    Rob at FXCM is offline DailyFX Administrator
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    Hi laurentius,

    Glad I was able to help. Allow me to answer your specific questions.

    Where does FXCM's price feed come from for CFD's?

    CFD prices are derived from the underlying index or spot product. For FXCM Ltd. Index CFD products, the quoted price is based on the relevant futures price minus a commonly used Fair Value. For Commodity CFD products, the price is based on the relevant futures price. Like FXCM Forex Products, CFD prices include FXCM's markup to the spread.


    Are CFDs regulated?

    Yes. CFDs are regulated in most countries in which they are traded.


    Can CFD's value levels differ with different brokers?

    Since CFDs are OTC (over-the-counter) products, their prices may vary from broker to broker.


    For a more in depth look at CFD trading with FXCM, check out our detailed FAQ for CFDs page. Let me know if you have any further questions. Thanks and have a great day!

    Thanks!

    Rob


    Quote Originally Posted by laurentius View Post
    Thank you for all the good answers on the SPX500 Rob.

    Could you please say something about how price feed delivery works with the CFD's? Like who is giving FXCM the data on the SPX500? And are there any regulatory control with CFD's, or can for example the SPX500 have many relatively different value levels with different brokers?

    Thanks,
    Laurentius
    Add your post to join the conversation or contact me directly at rob@fxcm.com!

  9. #9
    laurentius's Avatar
    laurentius is offline Member
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    Thank you very much for your answers Rob.

    Could you please elaborate some more on where FXCM get data feed on CFD's from? As we know on spot fx there are several banks which functions as price providers, but how does this work with CFD's? For example are there any direct connection to the exchanges or are there any "middle men" who for example determines what the Fair Value should be for the underlying instrument? Another question would be; does for example the data and value for the SPX500 come from one provider for all CFD brokers in the world, or are there many?

    Thank you.

    Laurentius
    “Those who say it can't be done are usually interrupted by others doing it.” - James Arthur Baldwin

  10. #10
    Rob at FXCM's Avatar
    Rob at FXCM is offline DailyFX Administrator
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    Hi laurentius,

    FXCM's data feed is it's own. It does not come from an outside source (besides tracking underlying instruments as they are being traded). FXCM accepts CFD orders and then offsets them when our dealing room decides it is necessary. I personally do not know if this is an automated system or a more manual process. CFD's execution is different that FX trading in that your CFD orders are not filled based on the execution with a middle man or liquidity provider. FXCM is temporarily holding that risk until the position is offset from it's books. As for individual pricing data for each CFD instrument, these do not come from a central location. Different CFD dealers will set their prices in the way that they choose.

    As United States' resident, I don't have personal experience in trading these instruments, but if you have more questions and want to speak to someone that has more knowledge about CFD's, I could get you in contact with them. Simply shoot me an email, rob@fxcm.com

    Thanks!

    Rob


    Quote Originally Posted by laurentius View Post
    Thank you very much for your answers Rob.

    Could you please elaborate some more on where FXCM get data feed on CFD's from? As we know on spot fx there are several banks which functions as price providers, but how does this work with CFD's? For example are there any direct connection to the exchanges or are there any "middle men" who for example determines what the Fair Value should be for the underlying instrument? Another question would be; does for example the data and value for the SPX500 come from one provider for all CFD brokers in the world, or are there many?

    Thank you.

    Laurentius
    Add your post to join the conversation or contact me directly at rob@fxcm.com!

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