Investors can now trade CFDs with unrivalled confidence using Australia's first full service CFD advisory desk, providing advice and CFD trade execution with orders placed by telephone or online. Trade CFDs with professional advice from our licensed advisers or choose one of the CFD trade recommendations in our daily STOCK CUBES report.
More importantly get the education you need to trade CFDs successfully from our education specialists who have extensive experience in teaching the principles behind trading success.
In this section:
What are CFDs?
Why trade CFDs with an advisor?
Why trade CFDs with Cube?
What are CFDs? Contract For Difference (CFD) is a financial instrument linked to the underlying share price. Consequently, no rights are acquired or obligations incurred relating to the underlying share and, depending on your view of a company"s share price, you can buy (go long) or sell (go short). The ability to go short is one of the principal attractions of CFDs as other methods of going short are both expensive and inconvenient.
CFD stock derivatives offer a more efficient way of investing in stocks and stock indexes, particularly for active investors. CFD prices are linked directly to their underlying stock price, you can also trade index-tracking CFDs that are linked to the performance of entire stock indices.
CFDs are growing rapidly in popularity and, for the educated experienced investor, are proving an attractive means of gaining exposure to the economic performance and cash flows of individual equities without the need to invest in the physical share.
This is a more efficient use of your capital because you only have to allocate a small proportion of the total value of your position to secure a trade, while maintaining full exposure to the market. This enables you to magnify the returns on your investment.
Below is an example of the difference between the Return On Investment when buying Telstra CFDs and buying the equivalent physical Telstra shares with a typical broker.
*Prices/Conditions at July 14, 2006 correct
The example demonstrates Net profit received in this instance is greater with the CFD provider than with broker Y and Return On Investment is also dramatically better. Based on purchasing the 2,000 Telstra shares/share CFDs and holding the position for one day. If the price had moved in the opposite direction by 40 cents you would realise a gross loss of A$800 trading with the CFD provider. Broker Y example based on similar competitor in Australian financial market.
• CFD’s are highly leveraged
• Markets are highly volatile
• Both gains and losses are magnified
• Success with CFD’s depends upon a proven share trading approach
• Convenience - An adviser can monitor the market for you
• A good adviser will make informed choices
• As a prelude to doing it yourself
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Profits are magnified (stock price moves of 5-10% can translate into 60-150%)
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Drawdowns and losses are also magnified (note that if your stock price drifts 5-6% this could translate into a 40-60% loss in your hard earned trade gains)
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You must identify and trade trending stocks
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You must avoid times when the stock p[rice is trapped in a range
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The trade must be managed/monitored constantly
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You must avoid drawdons
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You must remember you are paying interest on the total underlying position
As you can see there is much to consider with a CFD trade. So take our advice and leverage your trading success - it make all the differnece in CFDs.
• Cube is the first CFD advisory desk in Australia
• Our strategies are formulated specifically for CFD trading
• We have a systematic and dynamic approach
• Allows you to plan the trade, trade the plan
• We actively monitor trades
• Strong experience trading shares and derivative products
• We educate, research and trade! Click here for CFD Education modules
Past results do not necessarily reflect future results
FAQ's on CFDs - Click here for more information on CFD's
