Sep 6 2010
With the increase in popularity of share trading by Australian investors, it isn't startling that more sophisticated trading platforms and products are being actively used by experienced investors searching for extra trading opportunities. Contracts for differences, or CFDs, are a growing 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 drawn 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 shrewd traders conscious of costs 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 prepare its detailed 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 doesn't include newbie investors in their assessment, as they do not believe this product is suitable for this type of investor.
When assessing the
CFD providers in Australia, consideration is given according to their pricing for Australian equity CFDs, this comprises of commission and financing charges. Cannex Canstar also takes into consideration the features and versatility of using their services, risk management tools, as well as their margin requirements. The Cannex Canstar methodology consists of 200 pieces of information, making the scope of their CFD trading star ratings far more than most traders could hope to compare by themselves. Their evaluation is dependent on CFD trading of ASX share CFDs. Cannex Canstar also provides extra points for having 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 management, information, variety of tradeable securities, brokerage, interest costs, etc. It isn't a score 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 usually a self-managed activity and return of profits or losses is dependent upon the individual investor's judgments and behavior.
Historical 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) offering and GFT and IG Markets for their Market Maker CFD product. The newest challenger in the CFD market, International Capital Markets (IC Markets) is poised to take out the
Cannex Canstar CFD awards this year with its inexpensive Direct Market Access CFD package for full-time traders on the webiress trading platform.
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