With the increase in popularity of share trading by Australian investors, it is not surprising that more sophisticated trading platforms and products are being actively used by knowledgeable investors looking for extra trading opportunities. Contracts for differences, or CFDs, are a increasing in acceptance in the Australian market. CFDs are derivative products whose main attraction is the high amount of leverage they offer. Those with a strong understanding 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 not for the inexperienced trader or investor.
With astute traders aware of expenses and their impact on bottom-line profits, the question arises regarding which CFD provider offers better value. Yearly Cannex Canstar analyses products from CFD providers in Australia to compile its comprehensive analysis on CFD trading. CFD providers are assessed based on part-time traders and full-time traders using the Market Maker and Direct Market Access trading models. Cannex Canstar does not include newbie investors in their assessment, as they do not consider this product is suitable for this sort of investor.
When assessing the CFD providers in Australia, consideration is given based on their pricing for Australian equity CFDs, this comprises of brokerage and interest charges. Cannex Canstar also takes into consideration the features and flexibility utilizing their services, risk management tools, as well as their margin requirements. The Cannex Canstar methodology comprises of 200 pieces of information, making the scope of their CFD trading star ratings far more than the majority of traders could hope to compare by themselves. Their evaluation is based on CFD trading of ASX share CFDs. Cannex Canstar also provides extra 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 capabilities, client support, education, account administration, information, variety of tradeable securities, commission, interest costs, etc. It is not a rating of expected returns from use of these services and by no means implies that an investor should have an expectation of positive returns. CFD trading is usually 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 categories 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 most recent competitor in the CFD market, International Capital Markets (IC Markets) is poised to take out the Cannex Canstar awards this year with its low cost Direct Market Access CFD package for full-time traders on the webiress trading platform.
Author Resource:-
John Benson is a skilled CFD trader with over 15 years trading experience in CFDs, Forex, Futures, Stocks and Options. John has written a number of guides and articles on day trading and investing in CFDs. John has first hand experience trading with a number of the CFD providers in Australia and abroad and has conducted quite a few combined seminars and lectures on CFD trading with a lot of of them.
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