CFD Trading In Australia

Some years back, Cfd trading Australia was introduced by the Australian foreign exchange. This move meant that retail investors could use contracts for differences to enter the foreign exchange market with minimum brokerage fees. Contrary to what was the standard fee by then, cfd providers initiated a $10 fee for each transaction.  This reduced the fee a great deal and enabled more traders to trade.

Of course the fee attracted numerous popular retail traders who came with various methods of trading such as over the counter option, which was executed as a trade counter and market provider party. In order to counter the competition, some share brokers came up with an alternative and indexed exchange traded cfds. This move was seen to enhance knowledge and interest in cfd trading in Australia.  

State of CFD Trading in Australia

More than 30,000 Australian traders today are said to be involved in trading cfd tools. This is a huge increase compared to previous years. The cfd trading interest is founded on the efficiency and flexibility of the trading tools. There are various cfd markets which include;

·        Index

An example of stock indices is Australia 200. This is representative of a group of experts who have been tasked with helping traders to get exposed and expand particular communal market stock plans, and regulate national markets.

·        Forex

Foreign exchange currency remains the biggest trading asset by volume, asset, operation, and provision of liquidity.

·         Commodity  

Commodity trading has continued to develop due to various factors. For instance, what happens globally affects Cfd trading in Australia. In this case, China’s rise as a commodity manufacturer and provider has pushed the growth of commodity trading interest up. A close look at gold, agricultural products, oil, petroleum and metal products one can see that Australian traders are fast embracing cfd trading, and diversifying towards standard and raw commodities with low transaction costs.

How CFD Trading Operates

With cfd trading, investors can benefit regardless of the market fluctuation patterns. This means that traders will still earn profits whether the market moves down or up. However, this depends on the position they purchase. Still, traders will be required to devise more strategies in order to predict the market accurately. This will increase their chances of earning profits. For instance, if a trader thinks that an asset price is bound to go up, they may want to launch a purchase position. In the event they are of the opinion that the asset price will decrease, they may have to launch a sell position.

The advantage of CFD trading in Australia is that they can be a suitable substitute for ordinary stock market trading. In addition, traders can gain profits from a dropping market as compared to getting an increase in stock. Again, ordinary brokers utilize a 50% margin while cfd brokers need a 5% margin. Looking at this practically, one is likely to see that purchasing 100 shares priced at $20 will cost $2,000. A 50% on the other hand will need $1,000. If traders opt to use a cfd trading broker, they can trade for $100 low cash expenditure.

Cfd Trading Features

·         Enclosing the Portfolio

Many traders think that their portfolio may lose part of its general value. Cfd trading comes in handy in such circumstances as it assists the trader to short sell part of their shares. Some investors and traders alike have mastered this trick to counter volatility.

·         Buy or Sell

Traders can purchase or sell regardless of their market predictions. This comes in handy especially for investors who are looking to benefit fast from trading. However, being able to buy or sell does not save traders from incurring losses. It is worth mentioning that losses are bound to increase in the event the market fluctuates away from your prediction.


Cfd trading in Australia has come of age. Australia traders can choose from the numerous available cfd platforms depending on their reliability and reputation, services they offer, and convenience. Additionally, the regulatory body in the country has made strides in providing a conducive trading environment.