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According to Finance Magnates, Australia had the largest Forex and CFD market in 2021. In fact, it seems that there are around 100,000 traders in the country, and each of them invest over $8,000. This makes Australia the largest CFD market per capita.
Considering this high volume of investments, it is important to know what’s the best CFD trading platform used in Australia. It is important information for users across the globe, since this platform managed to gather countless traders and investors thanks to the reliability it proved over time.
- 1 The best CFD trading platform in Australia
- 2 What you should consider to select the best CFD trading platform
- 3 How does CFD trading work?
- 4 What are the advantages and disadvantages of trading CFDs?
- 5 How does trading CFDs work in Australia?
- 6 Conclusion
- 7 FAQ
The best CFD trading platform in Australia
eToro is a popular online broker that offers CFD trading services in Australia. It has gained a reputation for being a user-friendly platform that provides a range of features and benefits for traders.
One of the key advantages of using eToro for CFD trading in Australia is its diverse range of CFDs across various markets, including stocks, indices, commodities, and cryptocurrencies. Additionally, eToro’s social trading feature allows users to follow and copy the trades of other successful traders, providing an excellent opportunity for learning and potentially increasing profits.
While eToro’s fees for CFD trading are generally higher than some other brokers, the platform’s ease of use and range of features make it a good option for traders who are looking for a convenient and accessible trading experience. In this article, they will explore the pros and cons of using eToro as an online broker for CFD trading in Australia, helping you to make an informed decision about whether this platform is right for you.
- User-friendly platform
- Social trading
- Diverse CFDs
- Research tools are limited compared to other brokers.
- Fees for CFD trading are generally higher than some other brokers
In conclusion, eToro can be a good choice for traders who are looking for a user-friendly platform with a range of CFD options, and who are willing to pay slightly higher fees for the convenience of using the platform. However, those who are looking for more in-depth research tools and lower fees may want to consider other brokers. As with any investment, it’s important to do your own research and carefully consider your options before making a decision.
IG Markets is a leading CFD trading platform in Australia, providing access to a wide range of financial instruments. The platform offers competitive pricing and advanced trading tools, including customizable charts and technical analysis tools. IG Markets also provides a mobile trading app for traders on-the-go.
- Regulated by ASIC for security and protection
- User-friendly platform with various tools
- Available on desktop, mobile, and tablet
- Competitive spreads for maximizing profits
- Limited markets available with IG Markets compared to some other brokers
- High minimum deposit of $200 AUD may be a barrier for some traders
In conclusion, IG Markets is a reputable and reliable online broker for CFD trading in Australia. The broker is regulated by ASIC, provides a user-friendly platform, and offers competitive spreads. However, the limited market access and high minimum deposit may not suit every trader. Overall, IG Markets is a good option for those looking to trade CFDs in Australia.
Plus500 is another popular CFD trading platform in Australia, known for its user-friendly interface and low trading fees. The platform offers a wide range of financial instruments, including forex, stocks, commodities, and cryptocurrencies. Plus500 also provides a demo account for traders to practice their trading strategies before investing real money.
- User-friendly platform
- No commission on trades
- Wide range of markets available
- Limited educational resources
- Limited customer support
In conclusion, Plus500 is a good option for traders who want a user-friendly platform, a wide range of markets, and low trading costs. However, the limited educational resources and customer support may not suit everyone. Overall, Plus500 is a reputable and reliable online broker for CFD trading in Australia.
82% of retail CFD accounts lose money.
CMC Markets is a global CFD trading platform with a strong presence in Australia. The platform offers a wide range of financial instruments, including forex, stocks, and commodities, and provides advanced trading tools, including customizable charts and technical analysis tools. CMC Markets also offers a mobile trading app for traders on-the-go.
- Wide Range of Markets
- Advanced Trading Platform
- High Trading Costs
- Customer Support Responsiveness
In conclusion, CMC Markets is a reputable and reliable online broker for CFD trading in Australia. The broker is regulated by ASIC, offers access to a wide range of markets, and provides an advanced trading platform. However, the high trading costs and limited customer support may not suit everyone. Overall, CMC Markets is a good option for experienced traders who want advanced trading capabilities and a broad range of trading opportunities.
Saxo Markets, also known as Saxo Bank, is an online broker that provides trading services for CFDs, Forex, Stocks, and more. This broker offers a number of advantages for traders who want to trade CFDs in Australia. Firstly, Saxo Markets is regulated by the Australian Securities and Investments Commission (ASIC), ensuring that the broker operates under strict guidelines and adheres to industry standards. This provides Australian traders with a level of security and protection when trading CFDs.
Secondly, Saxo Markets offers an advanced trading platform that includes a wide range of tools, such as charting packages, risk management tools, and order types. This platform is customizable, allowing traders to tailor it to their specific trading needs. The advanced trading capabilities of the platform make it suitable for experienced traders who want to take advantage of a range of trading strategies.
Thirdly, Saxo Markets provides access to a wide range of markets, including over 9,000 CFDs. This is a significant advantage for traders who want to diversify their portfolios and take advantage of a broad range of trading opportunities.
While there are some potential drawbacks to using Saxo Markets, such as high minimum deposit and trading costs, these are outweighed by the advantages offered by the broker. Overall, Saxo Markets is a reputable and reliable online broker for CFD trading in Australia, offering a range of advantages for experienced traders.
- Advanced Trading Platform
- Wide Range of Markets
- High Minimum Deposit
- High Spreads and Commissions
In conclusion, Saxo Markets is a reputable and reliable online broker for CFD trading in Australia. The broker is regulated by ASIC, offers an advanced trading platform, and provides access to a wide range of markets. However, the high minimum deposit and trading costs may not suit everyone. Overall, Saxo Markets is a good option for experienced traders who want advanced trading capabilities and a broad range of trading opportunities.
What are contracts for difference and CFD trading platforms? A definition
They’re talking about CFDs and CFD trading platforms, but what does this mean?
Let’s start with a definition of CFD: a contract for difference, as the name suggests, is a contract between a trader or investor and a broker. It represents the position of a trader who is basing his buying or selling position on the future price of the underlying asset.
CFD trading platforms are those brokers that offer you the opportunity to trade these instruments.
What you should consider to select the best CFD trading platform
There are many factors you should evaluate to decide if a CFD trading platform fits your needs and your financial goals.
The following factors represent the most important features a broker should have:
- First off, a broker should be regulated-This means that the broker guarantees it’s compliant with the regulations regarding financial assets and services adopted by the country where the platform works, as well as regulations regarding AML (anti money laundering). The most evident thing that proves that a broker is compliant is the KYC protocol, that is, the process you need to complete to sign up and verify your account. In Australia, the organisation that decides this set of regulations is the ASIC – Australian Securities and Investments Commission.
- Then, a broker has to prove to be reliable-To know if this applies to the broker you want to use, check if it gives you all the information you need to know before you sign up, check if they are complete and clearly visible, and read reviews made by users and professionals.
- A good broker also has low fees. Fees significantly affect your possible profits: they apply to all the operations involved in trading and investing, and the lower the fees, the better.
- Intuitiveness is another feature your broker should have – you should spend time studying strategies and trading, not trying to understand how the platform works. Moreover, when it comes to trading you should be able to act fast, and this is not possible when the platform offered by a broker is too hard to use.
- Check the variety of assets the broker offers and what’s the minimum deposit amount -This will help you to manage your budget, to make realistic forecasts and to risk less money.
- Security is a must– It should concern not only the protocols used to secure the online platform, but also the security of your funds.
Moreover, if you’re a beginner, try to choose only CFD trading platforms that offer you demo accounts to enhance your capabilities without risking real money – like the virtual account offered by eToro.
How does CFD trading work?
As they mentioned in our definition of CFD – contract for difference, CFDs are contracts that represent a specific position of the trader or investor.
It is pivotal to understand this point, otherwise, you may confuse CFDs with other financial instruments and assets.
First off, CFDs can be based on different assets, and they became even more numerous with the rise of online trading and digital assets. For instance, a CFD can be based on a particular stock, or on a forex market, or on a cryptocurrency. But, to give you a practical example, when you trade a crypto CFD you’re not trading the crypto itself.
This happens because, as they said, the CFD is a contract that represents something else. In our example, our crypto CFD is a contract based on a specific crypto. The crypto represents the underlying asset.
So, CFD are derivatives, and not assets. Again, if you trade a stock CFD, you’re not owning any shares of the company linked to the stock.
When you trade CFDs (Contracts for Difference), you enter a contract with the broker based on your predictions of an asset’s price movement. For instance, if you anticipate that the price of a specific asset will rise, you can trade a contract representing that asset. Your potential profit or loss is determined by the difference in the asset’s price from the moment you enter the contract to the moment you close your position. It’s crucial to understand that while you stand to gain if the asset’s price moves in your favor, there is also a significant risk of loss if the price moves against your prediction. The difference in price, which determines your profit or loss, is calculated from the moment you initiate the trade to the moment you sell your contract. As such, trading CFDs involves a high level of risk and can result in the loss of your capital.
On the other hand, if you think that the price of the asset will fall, you open a selling position – in jargon, you go short. Also in this case, your profits – or losses – will be calculated as the difference in the price of the asset from the moment you open your position to the moment you close it.
The result is that a CFD is characterised by three key elements:
- It is always formed by two positions – for instance, your buying and your selling order,
- It is a contract whose price is based on an underlying asset,
- You don’t really own the underlying asset.
Understanding these points allows us to better assess what are the reasons behind the success of CFDs. Of course, traders and investors are aware that all trading activities are risky and they base their decisions on the advantages offered by CFDs. At the same time, as it always happens, CFDs also have downsides.
What are the advantages and disadvantages of trading CFDs?
Trading CFDs comes with both advantages and disadvantages and you should be aware of both before choosing a CFD trading platform to use in Australia.
Advantages of trading CFDs
- Being contracts and not the underlying asset they represent, CFDs can be less costly. For example, let’s say that you want to tarde shares that would normally cost $100 each. If you choose eToro, the minimum amount to invest in this kind of CFD is less than $100, so it’s like trading a fraction of that share.
- Differently from assets that require you to trade and hold until the price goes up, with CFDs you can profit from both uptrends and downturns, since you can go long – trade– and short.
- You can use leverage – so you can increase your capital by borrowing funds from the broker without any upfront payment. Then, you can return the borrowed capital when you close your position.
- CFDs represent a useful tool to manage risk. For example, let’s say that you bought 10 shares of a tech company. If market conditions are uncertain, you can reduce possible losses by opening an opposite position thanks to CFDs based on the same shares, in order to reduce possible losses.
Disadvantages of trading CFDs
- As mentioned, CFDs are risky financial instruments.
- Leverage can be used to increase your position on a trade however, this can also increase the risks involved.
- You’re not the owner of the underlying financial asset – you’re just trading a derivative instrument.
How does trading CFDs work in Australia?
They’d already mentioned regulations, and when it comes to the best CFD trading platform in Australia, you need to make sure that the platform is compliant with the regulatory framework of the country.
In Australia, the organisation that regulates CFDs is the ASIC – the Australian Securities and Investments Commission.
The regulatory framework designed by the commission aims at protecting traders and investors and, maybe after the rise of online trading after the outbreak of the pandemic, this framework was modified in 2021.
The current framework was extended until 2027. Among the decisions taken by the commission, they can find the reduction of the leverage range and the negative balance protection – meaning that your account can’t be negative and your position must be automatically closed by the platform if you reach 0.
So, when choosing the best CFD trading platform in Australia, make sure that the platform respects the regulatory framework released by the ASIC – otherwise, the platform is not regulated.
It is useful to know what’s the best CFD trading platform in Australia, since the Australian market is one of the largest in the world.
According to the reviews of users and professionals, the best CFD trading platform is eToro, a broker that operates in 140 countries across the globe.
The advantages of this CFD trading platform are mainly its low costs – there aren’t fee to open and manage your account, the opportunity to automatically copy traders and portfolios, the opportunity to network with other traders and the presence of free training and news related to markets.
Moreover, eToro is intuitive and regulated – also in Australia. It is important to choose a trading platform that follows the regulatory framework designed by competent authorities – in Australia, this authority is the ASIC. It’s pivotal because the set of rules concerning financial products and assets are studied to protect traders and investors.
So, choosing a regulated trading platform is one of the factors you have to take into account before choosing the broker that better fits your needs.
According to users’ and professionals’ reviews, a good CFD trading platform in Australia is eToro. You can find a complete eToro review on Stockhax.
CFD trading platforms are those brokers that offer the opportunity to trade CFDs – contracts for difference.
It is possible to make money trading CFDs however profits cannot be guaranteed. if you adopt a strong trading strategy, this will increase your chances of success – but always remember to take fees into account to correctly calculate your profits.
CFDs allow you to go long and short, you can use leverage to increase your capital without any upfront payment, they can be less expensive than their underlying assets, you can use them to hedge your investment portfolio.
The organisation that regulates CFDs in Australia is the ASIC – the Australian Securities and Investments Commission.
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