Since their introduction into the financial market 15 years ago, Contracts For Difference (CFD) buying and selling has grown into a strong liquid investment answering the necessities of more than a few individuals mainly traders and other market principals.
What is CFD trading in Australia all about?
Upon initiating a CFD, one bets that the value of the selected financial asset will either go up or down. When you believe that the price of this particular asset will go up, you are definitely the buyer in the contract. On the other hand, if you believe that the price will drop, then you are the seller.
If the market favors you then the party that you signed the contract with will have to pay you the price difference (minus the bid-ask price spread). However, if the market goes against your positions, you ought to pay the price difference to the other party. The Australian CFD platforms are always able to deliver trades at the quoted prices even during the period of fast moving markets.
Given the volatile nature of the market, CFD trading in Australia has and continues to rise on a variety of financial instruments with the largest volume being in forex. However, one’s trading choices and strategies should be solely based on the markets you’re most familiar with and whose prices you stand the best chance of forecasting
CFD Trading with Saxo Capital Market
Saxo Capital Markets Limited, Australia (a subsidiary of the Saxo Bank A/S) is an online trading and investment specialist. Saxo Capital Markets, Australia Pty Limited has operated in Sydney since 2011; they are licensed and regulated by the Australian Securities and Investments Commission.
Saxo Capital Markets facilitates trading and investing for both private and institutional Australian clients by giving them access to over 30,000 tradable instruments available in the global financial markets. The company takes pride in offering innovative and diverse trading opportunities that incorporate personalized watch lists, tailored charts, news filters and risk management tools.
Since joining the Australian market, Saxo continues to become one of the most established players in online trading and investing. Saxo is also dedicated in offering high level service to their clients, broad product offering, great technology and competitive prices.
The CFD markets Saxo has to offer
· Single stock and ETFs
Saxo provides a direct market access that has CFDs on more than 8,800 single stocks and 675 ETFs which are traded on the world’s biggest exchanges.
· Index trackers
There are intraday margins and fixed spreads on 29 index-tracking CFDs offered at Saxo.
Saxo offers CFD on seven forex pairs which have tight all-inclusive spreads without any additional commissions.
There are CFDs on five government bonds available including the French 10 year OAT and a German 10 year bund.
Advantages of CFD trading with Saxo
1. Higher Leverage
One major benefit of Cfd trading in Australia is that the CFDs provide a much higher leverage compared to the traditional trading. Saxo provides a standard leverage in the Australian CFD market current which starts as low as a 2% margin and can rise to 20%.
Lower margin requirements can translate into less capital outlay for an investor, and great potential returns. It is important to also note that an increase in leverage can also magnify the losses.
2. A Global Market Access
Saxo offer CFD products in all the world’s major markets, providing Australians with round the clock access to valuable trading opportunities.
Fortunately, Saxo’s CFD instruments can be shorted without the borrowing costs since the trader does not own the underlying asset.
3. There are day trading requirements
Other financial markets usually demand a minimum amount of capital to day trade while some put limits on the amount of day trades to be made within certain accounts.
But Cfd trading in Australia is not bound by such restrictions and all Australian account holders can day trade whenever they wish.
4. No Shorting Rules and Borrowing Stock
Some markets have rules that prohibit shorting thus requiring the trader to borrow the instrument before selling short or have different margin requirements for the short and long positions.