Shares Prices

I have been buying and selling CFDs in Australia since they were first introduced in 2003. Over this period I’ve dealt with all the major CFD brokers in Australia first hand. When talking to groups of traders at trading expos and seminars all-around Australia I often get asked who’s the top CFD provider? I wrote this review to help answer this million dollar question.

This review covers all the major CFD providers in Australia that I’ve dealt with first hand, when writing this review I took into consideration four major factors which as an expert trader I believe are the critical requirements to consider when deciding on a CFD provider, they are:

1. Customer Service
2. Platform stability and ease of use
3. Product range
4. Pricing

It is very important to note that there are CFD provider reviews carried out by a number of websites and magazines in Australia most of which are biased with the winners frequently being chosen by journalists not traders and determined by the amount of cash spent on advertising and marketing in the magazine or on the web site that conducted the review. Only genuine traders with real life experiences are able to conduct a fair an unbiased review.

The key players in the CFD industry in Australia are:

· IG Markets
· CMC Markets
· International Capital Markets (IC Markets)
· MF Global

I did not conduct a review of Etrade or Comsec as these companies are purely resellers of MF Global’s CFD offering.

In this review I discuss my real life experiences with each of the providers mentioned above whilst taking into consideration the four critical elements that I view as crucial when choosing a CFD provider.

IG Markets
Customer Service: I have had an account with IG Markets for the last three years I use this account as my backup account. Over this time I’ve found that their customer support has declined drastically, in-fact at on one occasion I was unable to contact a dealer as they were all busy. In general I regard their customer service to be inadequate and wouldn’t recommend them.

Platform stability and ease of use: I use both their Pure Deal and L2 trading platforms and have had troubles with both. Recently I experienced the problem of being unable to look at my positions and free equity preventing me from buying and selling all morning. I would not regard either of their trading platforms as suitable for a professional trader.

Product range: IG Markets has a great product range, this is certainly one of their strong points. One thing I would say is that if you’re looking to trade CFDs on exotic futures contracts and currency pairs IG Markets is definitely not the CFD provider for you as they have a tendency to stick with a fairly mainstream offering.

Pricing: On Australian share CFDs IG Markets has competitive pricing, their minimum commission on share CFDs is low and their spreads are tight on the main currency pairs, however for anyone who is an active trader and are seeking volume discounts don’t bother trying to negotiate with IG Markets their commission schedule is fixed.

CMC Markets
Customer Service: Out of all of the CFD providers that I have ever traded with I have found CMC Markets to have the worst customer service, with CMC Markets your problems start as soon as you call them up for support and choose a number from 1 to 10 just to talk to someone. I’ve also found their support staff to possess only a basic knowledge of their trading platform. General queries and problems continually must be escalated to more senior staff, not the kind of support an experienced trader demands.

Platform stability and ease of use: In recent times the stability of their trading platform Market Maker has improved a lot, though the platform still lacks functionality such as course of sales for share CFDs, something an experienced trader demands.

Product range: CMC’s product range is broad and not dissimilar to that of IG Markets however it is worth noting that CMC offers an exceptional range of CFDs over exotic futures contracts and foreign exchange pairs, exactly what is absent from IG Markets product offering.

Pricing: Like IG Markets CMC markets offers good entry level pricing but lacks the pricing flexibility required when it comes coping with high volume traders.

International Capital Markets (IC Markets)
Customer Service: I had not heard about these guys until about one year ago. After calling them up and chatting with one of their sales staff I thought I’d give them ago. My experience to this point has been second to none. Their customer service is top notch. In spite of the size of my trading account I have my very own dedicated account manager that is familiar with the market and what I need, this is very different to the call centre operations of IG and CMC Markets.

Platform stability and ease of use: They provide a number of trading platforms to cater for a varied range of customers. They have got a platform for learners, intermediate and advanced traders. As I’m an experienced trader I selected their advanced platform Pro Deal which offers all the functionally a professional trader needs. Although I cannot speak for all of their trading platforms their advanced trading platform has been trouble free and I would unquestionably recommend it to anyone.

Product range: All of the products missing from the two major providers such as futures, DMA functionality and exotic forex pairs are offered by these guys. Whilst writing this review I could not think of a product that these guys could not offer.

Pricing: Like most of the CFD providers reviewed these guys offer excellent entry level pricing, however the difference with these guys is that they also have a flexible pricing arrangement for frequent traders. As I’m an active day trader they were prepared to drop their minimum charge and offer me a commission rate of 0.04% on DMA CFDs, the best rate offered to me by the other providers was 0.08%, they are 50% more affordable!

MF Global
Customer Service: At first I believed that these guys would take the cake on the customer support front, however unfortunately their high level of service didn’t last for more than one week after funding my account, this was quite surprising and not something that I’d have expected. Once I was up and trading these guys did not want to know me, this sort of customer service leads me to rate them as the worst of the lot.

Platform stability and ease of use: These guys offer one platform for CFDs, webIRESS. Even though webIRESS is a great platform they don’t offer anything else, in comparison with IC Markets who offer webIRESS along with many other trading platforms. Their offering is basic and not what an expert trader demands.

Product range: MF Global offers you all the futures contracts you could ever imagine however when it comes to forex, CFD and share trading they cannot compete with the likes of IC Markets. If it’s only futures you want than these are the guys to speak to, but for CFDs you should give them a miss.

Pricing: The entry level pricing for CFD trading at MF Global is expensive, they do however offer packages for frequent traders with discounts down to 0.08%, this is still a far cry from the 0.04% offered by IC Markets. Even though the CFD commission rates are costly I am sure that if you were only trading futures you could potentially get some great pricing from MF Global

Conclusion
As a professional trader I’m quite demanding in what I expect from my CFD provider, I am sure that this is not the norm for many traders. There was actually only one CFD provider from those reviewed that could give me what a professional trader would demand, the remainder of the CFD providers have great offerings that would suit an typical trader but when pushed to their limits might falter, this is something a professional trader can’t afford to have occur when money is on the line. Besides my number one choice IC Markets I would chose IG Markets as my backup, despite their shortfalls they do have reasonably good platform along with a broad product range. There is however a big difference in customer support and pricing of IG Markets product offering compared to my number one choice, IC Markets.

Taking into consideration ordinary stock trading functionality, CFD Trading is free from the quantity of shares you can have. And there is also no matter what organization it is. Though you have to notice the one difference with CFDs. I mean the movement of cost. It is able to creep up or fall down.

The one aspect that makes sense for CFD trading is the dissimilarity between changing value.

The main feature of CFD is the contract to create a profit from the dissimilarity of two values. What makes a sense here is the right forecast which can be hard to do immediately. But in some time you can perform all this easily with no necessity to possess any shares.

What Aspects to Think of
The first thing to notice is that for CFD trading, some quantity of margin money needs to be deposited upfront for the trader. The charge is taken for certain benefits you obtain from CFDs.

You must to notice the market all the time for the purpose to receive the necessary information about the CFD. It is important for choosing the right moment to sell and purchase. Somebody with a great practical know-how may easily result in a tidy quantity of profit as a result of CFD trading.

Efficient Options To Protect Your Money
If you have a strong need to defend your interests in CFDs you should consider in a stop-loss process to be able to risk. Even in case when the cost of that share keeps on dropping you will have already defended yourself and prevented an occasion where you can lose a significant amount of money.

One more excellent way of making sure that your long term gains are not affected is, by using CFDs as a hedging tool to protect from volatile markets. You have to be absolutely certain in the fact you traded good at the CFD.

Thus all you can do is to open your CFD account to check that it is not influenced and no matter whether price drops or rises. It is a win-win case and a good way to keep investments under your regulation.

Cutting it short it is important to underline that the most alluring trait of CFD trading is that you may open up in a high position even though you do not have to shell out the entire transaction amount for it.