Contract For Difference markets (CFDs) result from needs founded on numerous principal markets like forex, stock indices, and individual stocks. CFDs are pretty new and originated from the UK and have also become popular in Asia and Europe.

What are CFDs?

CFD’s are agreements between 2 traders to pay or receive the difference between the selling and buying contract values. Contract For Difference markets is available as unlisted markets, as well as listed markets. Unlisted CFD markets are similar to the forex markets as traders are only between the traders involved. In contrast, listed markets are similar to futures markets as trades go through an exchange.

CFDs are dealt with leverage and have lower margin needs than the equal futures markets.

Trading CFDs

CFD markets are traded similar to futures markets, except they do not expire. Thus, CFD markets can be charted directly, but since their loss and profit are linked directly to their basic market, it would be better to chart the primary market while trading on the CFD market.

Asian and European traders can trade unlisted and listed CFDs. Again, though, it’s not recommended to trade unlisted CFDs since they usually have the same struggles as forex markets (unscrupulous brokerages).

CFDs that the Sydney Futures Exchange offers have different trading times conditional on their primary market.

CFD Availability

CFD markets are available in Asia and Europe but not in the USA due to the SEC restrictions. US traders aren’t allowed to trade CFDs regardless of the CFD’s location.

Listed CFDs are currently available in Australia on the Sydney Futures Exchange and incorporate CFDs based on Australian Stock Exchange-listed stocks, various stock indices, and diverse currencies.

In addition, Asian and European exchanges have broadcasted devices to offer listed CFDs, which we suppose will be available soon.

CFD Markets

Contract For Difference markets (offered by the Sydney Futures Exchange):

Stocks

• TEL – Telecom Corporation of New Zealand
• CBA – Commonwealth Bank of Australia
• SGB – St. George Bank
• ANZ – Australia & New Zealand Bank Group

Stock Indices

• SPI – ASX200 stock index
• Z – FTSE100 stock index
• INDU – Dow Jones stock index

Currencies

• USDJPY – USD to Japanese Yen exchange rate
• EURUSD – Euro to US Dollar exchange rate