Contracts for Difference ("CFDs") are popular among investors who actively trade the financial markets across the globe. Their popularity was fuelled by the introduction of CFDs in Australia in 2002. The Australian CFD market grew quickly and in just five years, Australia became the first country in the world to offer exchange-traded CFDs in addition to OTC CFDs.
With an exciting history, CFDs have risen to become the most common method of derivative trading in the Australian market. They are regulated by the Australian Securities and Investments Commission (ASIC) and come with various trading advantages. However, they are also complex and carry potentially high risk. If you’re going to trade CFDs, it’s vital to know how the market works and this article will help you do that.