Trends in CFDs to Watch


CFD, a Contract For Difference, is essentially an agreement between a client and a broker. CFD is a reflection of how the underlying asset moves in relation to the position taken by the client. It is basically the difference between the entry and exit points in financial trade. CFDs have become mainstream over the last several years, making their popularity to go right through the stratosphere.This can be attributed to the several major advantages that CFDs have over traditional trading.One major advantage is that they offer traders more leverage than the traditional methods of trading.

The following are the top trends in CFDs to watch:

Tendency towards high value clients

Due to the many advantages of CFDs, more high value clients are ditching their old-time trading platforms to join CMC Markets. Instead of trading stocks that are traditionally very volatile, turn to CFDs. In stocks, you can wake up a millionaire one day, but go to bed with nothing at the end of the day. In CFDs, the actual underlying assets are never actually owned. This means that you are not likely to lose heavily when things don’t work out well.

Next Generation Online Trading App

The mobile app has seen a 75% growth of the number of CFD traders. It has enabled traders to do business from anywhere in the world. Keeping in mind that almost every human on the globe has a mobile phone, many are turning to the mobile platform to trade.Over one million clients across the globe are doing business via the mobile app.

The need to segregate client funds

CFD traders are also becoming more vigilant about client fund segregation. This follows extremely tricky times in the financial markets that were brought about by a series of volatile years. Segregating money from clients is important because it allows for better legal representation of all investors. This is especially the case for Australian investors who are currently enjoying a litany of legal protections.

More people intending to trade

A June report by reveals that more people are tending to join the fray in CFDs markets. The research by this group indicates that 9,000 people who had no history of CFD trading were making plans to join the market very soon. Most of these people have their eyes firmly set on at least one item of CFDs. Further research shows that more people are in a state of flux: Moving from Forex trading to CFDs. Some who are not too sure are still trading in both.

The shift from warrants to CFDs

Most of the traders joining CFDs were warrants traders. Research reveals that more than 38% of CFD clients have a prior involvement with warrants. This may be a clear indication that CFDs are safer to trade in than other products in the financial markets.

A One-Platform global access

One current trend in CFDs is the tendency towards a single global platform for all traders. Brokers are putting up their products on all major world markets. This means that traders are free to do business on any of the markets so long as they are open on the broker’s platform .CFDs have become a global enterprise.

No fees

Some CFD brokers are offering guaranteed stops without charging any fee. They have other ways of raising revenue. You need to know that many of the brokers are not charging any kind of levies on CFD trading. This is one of the reasons accounting for the popularity of this business.

Prioritizing customer service

When it comes to CFD trading, customer service is clearly a priority. They encourage customer feedback which they use to gauge the level of customer satisfaction. This is important in driving innovation and enhancing the effectiveness of CFD products and platforms.Treating customers as a priority has enabled CFD companies to achieve great market growth and returns.

A lift in promoter scores

Promoter scores have risen to 13% compared to the previous years. The increase in promoter score can be attributed to the high frequency of switching as observed from many clients. Many financial traders are making the shift from stocks to CFDs.The low risks in CFD trading are behind this growing trend. Financial markets have become shaky especially in the aftermath of the worst credit crunch to hit major global financial markets in recent times.

Further consolidation

CFDs are more client-centered than traditional stocks. This factor alone is attracting more traders into this business. Consequently, primary shares are steadily growing, indicating a further market consolidation. This implies that the market for CFDs is expanding by the day.