Frequently Asked Questions

What are the advantages of CFD Trading?

You can access global markets which include the Australian and Global Share CFDs, Indices, Sectors, Foreign Exchange, Commodities, Futures and Treasuries. CFD's are cost effective with low commissions, competitive margin rates, low cost of entry and exemptions from many taxes and commission payable when trading other markets.

What types of CFDs are available to trade?

We offer Over The Counter (OTC) CFDs.

OTC CFDs allow trading in a large number of indicies, commodities, forex, bonds plus local and domestic equities.

What is Direct Market Access?

Direct Market Access (DMA) allows you to trade directly into the order book of equity exchanges worldwide. You can place orders inside the market spread, gain full access to prices in size and gauge the liquidity on either side of the exchange.

What markets can I trade?

DMA CFDs cover over 500 ASX listed shares. OTC CFDs are available over many different underlying instruments such as Australian and International Shares, Indices, Sectors, Foreign Exchange, Commodities, Futures and Treasuries. In all there are over 3,500 products that you can trade.

What is the minimum amount required to open an account?

You will need a minimum deposit of A$1,000 to open an OTC CFD . For DMA CFD Accounts you will need a minimum deposit of A$5,000. These amounts can be varied at any time.

What is the minimum contract value requirement?

With the exception of FX there is no minimum trade size for CFD trading, so you can trade as little as one CFD. This allows you flexibility to take on as little or as much exposure as you like. For FX CFD trading the minimum contract value is the equivalent of USD10, 000.

How do you charge commission on CFD trading?

Commission is debited from your account as soon as the transaction is executed. It's usually calculated as a percentage of the trade value when you complete a buy or sell transaction (excluding Canadian and US CFDs). Commissions start from as little as 0.1% with a minimum charge of $7.00.

Do CFDs have an expiry date?

CFDs do not have an expiry date, so as long as the investor's account can support the required margin and interest incurred, a position can be held indefinitely.

Can I short CFDs?

Trading CFDs you have the opportunity to go both long and short. Refer to the Product Schedule to view the instruments you can short and the required margin

Do I receive dividends the same way as I do for shares?

Yes clients receive dividends on shares but they do not get any franking credits.

Margin

When you trade CFDs, traders have CFD margin requirements to maintain. The CFD margin is like a deposit, kind of like a deposit for a house mortgage. The margin requirement is used to protect the CFD provider if they need to exit the trader's position. Initial margin requirements varies from stock to stock, usually starts at 3% for blue chip companies and then varies all the way to 80% for unknown rarely traded company stock. However for currencies (forex trading), the margin requirement is as low as 1% (or 1 to 100).

How do I calculate margin requirement?

The Margin Percentage you need to pay for the CFDs you trade in is determined by CMC Markets. You will find a full list of Margin Requirements for all available CFDs in the CMC Markets Product Schedule available on our website. Margin Requirements may change at any time, and this can impact on the requirements to maintain your existing CFD open positions.