CFDs: not so different after all
Contracts for difference (CFDs) are the second most popular trading product in Australia, according to a study released by Market Analyst Software.
Conducted in the period from August to October this year, the survey of over 1,000 traders’ trading patterns found that one in two used CFDs.
It found that while 86 per cent of respondents trade directly in shares, 47 per cent trade CFDs, 20 per cent trade futures and commodities and 13 per cent trade options.
Looking specifically at the 30-49 year old demographic, it was found that 54 per cent of these respondents trade CFDs.
The study showed trading in CFDs was on the rise, with almost a third of those surveyed having increased their CFD trading activity in the last six months, whereas only 21 per cent of share traders had increased their activity during the same timeframe.
Market Analyst managing director Matthew Verdouw said he was “blown away” by the findings.
“I think the CFD market is going to go ballistic. Of course there are greater risks, but people are going to see that they’re a simple and easy thing to trade.”
He indicated that CFDs had probably taken market share from warrants, with only 3 per cent of respondents continuing to trade in this style of security.
“We’ve noticed a definite drop in requests for changes to our market analysis software with respect to options and warrants because people all want to try CFDs,” said Verdouw.
Recommended for you
Licensing regulation should prioritise consumer outcomes over institutional convenience, according to Assured Support, and the compliance firm has suggested an alternative framework to the “licensed and self-licensed” model.
The chair of the Platinum Capital listed investment company admits the vehicle “is at a crossroads” in its 31-year history, with both L1 Capital and Wilson Asset Management bidding to take over its investment management.
AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies.
With a large group of advisers expecting to exit before the 2026 education deadline, an industry expert shares how these practices can best prepare themselves for sale to compete in a “buyer’s market”.
