Contracts for Difference (or CFDs for short) have evolved from being an investment solution commonly used in the institutional sphere, to now servicing traders in the retail sphere as well.
In this topic, we look at what CFDs are and the markets that are covered. We then have a look at the various types of CFDs and consider how trader trends have changed over time to see attention focused on areas such as foreign exchange and indices. We also explore some basic trading strategies and how this compares to more traditional derivatives. Finally, we look at how regulations have evolved in the face of this product.
In this course you will learn to:
- Identify the key characteristics of CFDs that have driven their popularity in Australia and in other markets around the world
- List the markets that are covered by CFDs
- Explain the different types of CFD providers and how they impact traders
- Discuss some of the requirements when dealing with CFDs, particularly in relation to commission and financing charges, and disclosures
- Differentiate CFDs from other types of derivatives
- Construct some basic CFD strategies
- Outline the key concerns that have been voiced by regulators and some of the steps that have been taken to address these by the industry (both self-motivated and mandated).
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Each CPD course has specific learning outcomes, reflections and extra resources and activities, and is assessed via a short online multiple choice quiz. You have 8 weeks to complete the course.