With the increase in popularity of share trading by Australian investors, it’s not unexpected that more sophisticated trading platforms and products are being actively used by knowledgeable investors looking for additional buying and selling opportunities. Contracts for differences, or CFDs, are a growing in popularity in the Australian market. CFDs are derivative products whose main attraction is the large quantity of leverage they offer. Those with a strong knowledge of financial markets are attracted to CFDs, for their ease of use and simplicity. Often CFD traders are retail clients, institutional investors, hedge funds, day traders or the more savvy investors. CFDs, however, are usually not for the inexperienced trader or investor.
With astute traders conscious of expenses and their effect on bottom-line gains, the question arises regarding which CFD provider offers better value. Yearly Cannex Canstar analyses products from CFD providers in Australia to compile its detailed analysis on CFD trading. CFD providers are assessed based on part-time traders and full-time traders utilizing the Market Maker and Direct Market Access trading models. Cannex Canstar does not include beginner investors in their assessment, as they don’t believe this product is appropriate for this sort of investor.
When assessing the CFD providers in Australia, consideration is given based on their pricing for Australian equity CFDs, this consists of brokerage and financing charges. Cannex Canstar also takes into consideration the features and versatility of using their services, risk management tools, in addition to their margin requirements. The Cannex Canstar methodology includes 200 pieces of data, making the scope of their CFD trading star ratings way more than most traders could hope to compare by themselves. Their assessment is based on CFD trading of ASX share CFDs. Cannex Canstar also provides bonus points for providing investors with access to indices and additional markets.
The Cannex Canstar rating considers the trading platform and services offered by CFD providers, incorporating order fulfillment, charting functionality, customer support, education, account management, information, variety of tradeable securities, commission, interest costs, etc. It is not a ranking of estimated returns from use of these services and in no way implies that an investor should have an expectation of positive returns. CFD trading is mostly a self-managed activity and return of profits or losses is dependent upon the individual investor’s judgments and behavior.
Previous winners of the Cannex Canstar awards which are broken down into two different types being Direct Market Access (DMA) and Market Maker have been First Prudential Markets and IG Markets for their Direct Market Access (DMA) package and GFT and IG Markets for their Market Maker CFD product. The latest competitor in the CFD market, International Capital Markets (IC Markets) is poised to take out the Cannex Canstar CFD awards this year with its discount Direct Market Access CFD offering for full-time traders on the webiress trading platform.