CFDs are available on more than 500 listed shares on the Australian market and these are the most common type of CFDs.
The Australian Stock Market consists of 12 industry groups called sectors. This grouping based on the international standard to make it easier to classify companies into their respective industries. Some brokers offer Sector CFDs if you don’t want to do stock specific trading.
Index CFDs derive their price or value from the real time changes in value of the underlying index and can only be traded during open market hours. These type of CFDs allow you trade anticipated market trends rather than individual stocks.
Most brokers offer Index CFDs on the Top 200 and this index is perfect for practicing and developing day trading skills.
International Shares & Indices
Most brokers offer CFDs on international shares including the US, Europe, UK and Asia.
This means you can trade share CFDs on big international companies such as Google, Amazon, Wal-Mart, Toyota and other big brands that are not available in the Australian Market.
Most CFD providers offer CFDs on the major international indices including:
Dow Jones Industrial Average (USA)
FTSE 100 (UK)
Nikkei 225 (Japan)
Hang Seng (Hong Kong)
Trading CFDs on international shares and indices offers many advantages including:
– Access to bigger and more liquid markets that offer more trading opportunities
– Low brokerage fees because you don’t have to pay the extra administravie charges that you pay to trade physical international shares
– Australia’s time zone makes it user friendly if you want to capture some trading action in the UK, US or Asian markets
Forex has no centralised exchange. Currencies are bought and sold on prices generated through accumulated bank quotes.
Trillions of dollars are exchanged daily, all hours, making it one of the largest markets in the world.
Forex is important for financial institutions, central banks, and governments as it facilitates international trade and investment by allowing companies that earn money in one currency to pay for goods and services in another.
CFDs make it more affordable to pay this game. There are unique aspects to the Forex market including: around the clock market, most liquid market in the world, follows the sun around the world, costs are calculated on spread rather than commission (these will vary from each provider and throughout the day), they offer flexible position sizes and extremely low margins – lower for a Forex CFD pair trade than for a Forex futures contract.
Commodities are natural resources that can be processed and sold. In the financial markets these can include soft commodities that are susceptible to spoilage like wheat, corn and coffee. Hard commodities are those that don’t spoil such as cotton, aluminum and gold.
Commodities form the basic ingredient in many products for both the industrial and domestic markets. Supply and demand play off seasonal availability and man-made events. Not all countries have all commodities! Therefore, commodity prices can fluctuate greatly.
Commodities are generally traded in very large quantities, either on the cash market or, more frequently, on the futures exchange and especially because of their volatile nature, commodities are often used for speculation on their prices. Commodity Futures CFDs therefore offer traders the means to enter these markets.
Treasuries, bonds and interest rates are also covered by CFDs.