Types of CFDs
A CFD can exist over almost any underlying market that provides enough liquidity for the CFD provider to manage their risk and offer an efficient price to traders.
Popular and commonly traded CFDs include Share, Index, Commodity and Currency CFDs. Following an initial launch of DMA Share CFDs over the ASX 200 component stocks PhillipCapital will launch the full suite of CFDs offered by the Phillip group including Index, Commodity and Currency CFDs.
Share CFDS can be broken into two types, Direct Market Access (DMA) CFDs and Market Made CFDs. Although now days the two types can be merged within a providers offering the main difference relates to whether the CFD provider sends a corresponding order to the underlying stock exchange.
Key Features of DMA Share CFDs
- Prices mirror the underlying share both in volume and price
- Clients can place orders inside the bid and offer spread
- Execution is based on the last traded price
- Orders will appear in the market depth of the exchange after submission.