When we want to talk about CFD trading in Australia, we have to know some basic facts about this financial process first and to understand the main reasons for its popularity and importance in today’s business. In general, this trading concept, officially known as Contracts for Difference, started in the early 1990’s and it was created by two men – Brian Keelan and John Wood. It would not be exaggerated to say that this concept revolutionized financial practice, offering almost unlimited opportunities for private traders around the world. The Internet only quickened the whole process, and now this trading platform is among the most popular in a number of countries around the globe.
Why is CFD trading in Australia so special? First of all, it allows people to trade without almost any limitation. You can diversify your portfolio by investing across many different markets. Depending on your broker platform, you can easily access the global market and oversee all your transactions without any problems. Of course, you can trade with almost every possible commodity: oil, gold, solver, stock, currency…
In addition, CFD is famous because its leverage concept, which means that you can make a deal with funds that are far smaller than the actual value of certain contract. The percent of margin is lower than in traditional concepts, usually not more than 5%. This means, for example, that you will have to pay only 5% of the stock value to close the transaction. This also means that your funds will be free for other investments and opportunities on global market, allowing you to use your money in the most efficient way. CFD trading online made the revolution in financial and speculative business because now all private investors can take a part in this global market. In the old days, this was an exclusive right of big capital and huge investment funds.
This concept allows you to make a profit independently of the actual situation on financial market, and to make a profit from both “directions”- falling and rising. It is, in the essence, a contract between trader and broker and success or failure depends on the arrangement between two sides.
CFD trading in Australia – Facts and Trends
After these general remarks, now it’s time to get back to our main topic and see what’s the situation about CFDtrading in Australia. It is, without any doubt, the fastest-growing financial and speculative trading activity on the continent. In fact, Australian traders have realized its potential very quickly after CFD was introduced in March 2002. This concept allowed both private brokers and big companies to trade on global market with high priced shares, which was not the case before 2002. It replaced traditional methods of trading, which were used only as a part of a long-term investment strategy, where low priced shares were purchased for dividends. It changed after CMC Market entered the game, which opened new horizons in world of CFD trading in Australia. Now, there are more than 39,000 Australians in this business.