STOCKHOLM, June 10, 2021 /PRNewswire/ — Online CFD Trading in Australia surged alike many other online services during 2020, bringing convenience and accessibility to retail traders. The number of active traders has increased by 20% year over year to 710,000 and trading volume is up circa 100% in Q1 2021. The new peak is mainly driven by the quick recovery from the drop caused by COVID fears and online trading trending globally on social media because of meme stocks and cryptocurrencies.
The CFD Trading Market in Australia
CFDs (Contracts For Difference) have gained popularity over the last ten years with an early CFD trading retail rise in the UK. The online players have now expanded all the way to Australia, offering a new accessible way to invest globally with leverage.
CFDs or “Contracts for difference” markets have been around since the 1980s, gaining popularity in the UK in 1999, and finally making their way into the Australian trading markets circa 2002. CFD trading is different from traditional stocks in that it allows investors to make profits from speculative price predictions on the underlying assets without actually owning them.
Trading CFDs is a cheap way to get into trading markets, shares, forex, ETFs, and crypto while enjoying maximum financial leverage which used to be exclusive to professionals. Some online trading platforms even allow investors to start trading CFDs with as little as $10 (USD).
Fastest Growing Australian CFD Trading Platforms 2021
Due to the structure of Australia’s financial market, CFD trading platforms have to be duly authorized and regulated before users are invited to trade in the platforms. Having said that, here are some of our top picks.
Skilling is a new CFD trading platform that offers a range of financial instruments to global traders. It is owned by Scandinavians and is regulated in Seychelles. With over 800 different instruments available for trade, the company delivers a robust platform for both Forex and CFD trading.
A leading CFD trading platform with more than 317,000 global clients. They offer a simple trading platform with +2000 CFD markets to trade. They are duly regulated by ASIC, FCA, CySEC, and MAS, spanning four different countries, including the UK and Singapore.
A CFD Trading Platform owned by First Prudential Markets Pty, it is a duly regulated online Forex and CFDs platform. AFSL number is 286354 and they’re located at Level 5, Exchange House, 10 Bridge Street, Sydney NSW.
IC Markets was founded in 2007 with AFSL number 335692. They’re available on the MetaTrader 4 platform as well as MetaTrader 5, and cTrader platforms. IC Markets has a high leverage ratio, low spreads, and a useful education resource center for beginners.
FXCC has been around for more than a decade and offers commission-free trading. They have a large educational resource center, which helps beginners to start trading quickly. They allow users to choose from +100 markets ranging from Forex to CFDs and Crypto trading.
CFD Trading in Australia – A Retail Market on the Rise
2007 was the first global peak of CFD trading. The quick adoption of this new derivative of shares trading saw many huge CFD brokers establish new branches, especially in Australia. These huge brokers include IG Markets and CMC Markets, to mention a few.
According to industry estimates, the number of active CFD traders in Australia currently stands at 710,000. In contrast, there were only 9,000 active CFD traders in 2005, representing more than 4x growth since its inception in the country.
Even today, CFD trading is still very popular in Australia. It is even believed that a third of the trades the ASX sees are from CFDs.
There are more than a thousand different CFD assets across several brokerages. The underlying asset choices range from a number of cryptocurrencies, indices, FX, and shares.
The ASX exchange-traded CFDs don’t seem to resonate well with Australian traders. The reason for that is because traders like the freedom they enjoy with direct market brokers. The exchange model also costs a lot more, which clearly defeats the essence of CFDs.
Nonetheless, the stringent regulations from ASIC mean these expensive trading cuts across the board.
These regulations include:
1. CFD traders are protected against negative balances. CFD brokers are required to stop losses when the trader’s losses exceed their account balance.
2. CFD trading platforms are prohibited from offering promotional gifts to retail investors.
CFD Trading Market – Key Driver and Trends for 2021
Knowing the risks – CFD trading involves the use of leverage. When building leverage into a trading strategy, using effective risk management systems is vital.
The economic fallout from the COVID-19…
Read More: CFD Trading Australia Market Outlook 2021