CFD Information
A CFD trade involves two parties – “you” the client and “us” First Prudential Markets – cash settling the difference between the purchase price and sale price. CFDs allow you to trade shares on margin without having to physically own them. Therefore when opening a position you are not required to outlay the full value of your market exposure. First Prudential Markets CFDs require a deposit (cash or shares) which are pledged as collateral to open a position. This deposit starts at 3% of the total market exposure. This margin requirement will vary depending on liquidity and volatility of the underlying security. Advantages of CFDs?
Trade on Margin Trade both long and short Direct Market Access to real time market prices and multiple order entry options Dividends and Interest
What are CFDs?
Direct Market Access CFDs are an Over the Counter (OTC) derivative product which derive their prices and volumes directly from the underlying security. When trading CFDs with First Prudential Markets all your orders will flow directly onto the market which not only guarantees market prices but also enables you receive all of the benefits of regular share trading such as dividends, waiting in a bid or offer queue, participating in the opening and closing price auctions.CFD Advantages
Trading CFDs gives the ability to gain market exposure well in excess of your initial capital outlay. Investors are able to outlay a relatively small percentage of the total exposure to the underlying security. This leveraged market exposure will have the effect of magnifying both profits and losses.
CFDs allow you to take both long and short positions. This gives you the ability to benefit from both falling and rising markets or simply hedge against another positions that you may have.
First Prudential Markets trading platform gives you direct market access to real-time prices which you can trade CFDs and Shares on and receive market depth and other trading information. Investors have the ability to place Orders in real-time over the internet, with the flexibility of utilising Market, Limit and Stop-Loss Order types.
Holders of long CFD positions receive the benefit of cash dividends paid to holders of the underlying securities, but are charged interest on the value of their open position. Conversely, holders of short CFD positions must pay an amount equal to the value of any cash dividend paid to holders of the underlying securities (and in some circumstances, franking credits), but receive interest on the value of their open position.