The History Of CFD Trading In Australia
CFD stands for Contract for Difference, CFDs are a financial agreement made between a buyer and seller to make good the profit or loss incurred between when the CFD was purchased to when it was sold. CFDs are common in both Australia as well as the UK, they are mostly offered over indices, stocks and currencies.
In the early days in London where CFDs began they were known as SWAP contracts. It was not until around 2001 that CFDs became accepted by retail investors. It was CMC Markets and IG Markets, two large spread betting businesses based in the UK that bought CFDs to the forefront in the retail trader's arsenal. CFDs suddenly grew to become widespread in the United kingdom as they did not attract any stamp duty.
At the start of 2000 IG and CMC Markets decided to open offices up in Australia to promote their CFD products. CFDs became popular in 2007. Many international CFD providers noticed the uptake of CFDs in Australia and commenced operations. Presently there are 13 CFD providers operating in Australia and around 35,000 CFD traders.
The press has drawn CFDs to the spotlight in recent times as a result of investors loosing money due to the leveraged nature of the product. This combined with the recent collapse of Sonray Capital Markets has led to the Australian regulator paying close attention to CFDs. The regulators have been primarily interested as to how providers manage client money.
At present CFDs remain one of the most common financial products for retail traders in Australia, although unconfirmed it's estimated that CFD volumes account for around 35% of ASX exchange turnover. As CFDs are an over the counter product it is difficult to confirm this number.
CFDs in Australia are largely traded live on the internet through a selection of proprietary CFD trading platforms offered by the major providers. Many of these platforms were originally developed for forex CFD trading however due to the similarities between share CFDs and forex CFDs the platforms have been tailored to suit share CFD traders.
CFD trading is popular amongst on-line share traders. Share trading is extremely popular in Australia, in fact on a per capita basis Australia has the highest proportion of share ownership in the world.
It is important to note that before opening a CFD trading account you are aware of the the risks involved in trading CFDs. The gearing CFDs offer provides the potential to make money, however you should be aware that you could also loose money. CFD providers must issue Product Disclosure Statements explaining the benefits and risks of the product, it is important that you read this document before you start trading CFDs.
Article Source: FxTradingStock.com
About the Author
Learn more about CFDs. Stop by Ben McGrath's favourite site where you can find out all about CFD trading and how it can help bring you the financial freedom you deserve.
by: Ben McGrath
Total views: 27
Word Count: 457
Date: Sat, 31 Jul 2010
Publish/Share this article
To use this article on your site click here to get the HTML code
Rating: Not yet rated
Login to vote
Related Articles
Tips On How To Profit In Virtual Stock TradingLet's Choose A Forex Broker.
Some Tips On How To Forex Trade Online To Know
Stay Away From Requotes In Forex.
Helpful tips for Finding the right Forex Trading Program
Forex Currency Trading Software program -- Pick the Proper 1!
Forex Trading Strategies - What To Do When You Loose
Currency exchange Robot Trading Systems - Get the Full Benefit!
