Types of CFDs

There are three different Contracts for difference models – Direct Market Access CFDs, Exchange Traded (ASX CFDs) and Market Maker CFDs.


Direct Market Access CFDs

First Prudential Markets provide CFDs via the Direct Market Access (DMA) model because we believe it is the most fair and transparent model. Direct Market Access CFD orders flow directly onto the underlying market guaranteeing you true ASX prices every time you trade. DMA CFDs result in real time execution, guaranteed market prices and allow to you to participate in the order book and opening and closing phases of the market.

Exchange Traded CFDs

When trading ASX CFDs, orders are entered directly via a Participant into the ASX CFD central market order book. This order book is available for the market to see. All orders are executed on a strict price/time priority. This means that the first order with the best bid or offer price is always executed first. Trading in the ASX CFD central market order book also ensures 'client orders' are always given priority over a broker's 'house orders'.

Market Maker CFDs

Market Maker CFD prices are not identical to the prices on the underlying market. Market maker prices derive their prices from the underlying market, rather than providing identical prices exchange prices. As an intermediary a Market Maker has the ability to alter prices in their favour, causing slippage which can be a significant cost of trading. Market makers do not hedge 100% of their CFD positions and have the potential to profit from client losses. When trading through a market maker orders are at the discretion of a dealer. CFD orders are not placed directly on the market but flow through a dealer, resulting in orders being filled at inferior prices, so trading is slower especially in fast moving markets.

 

Minimum commission, interest, platform fees, dividends, variation margin and other fees and charges may apply.

The information within this website does not take into account your objectives, financial situation or needs. Consequently, you should consider the information in light of your objectives, financial situation and needs before making any decision about whether to acquire the product. A Product Disclosure Statement is available from First Prudential Markets (either from this website or on request from our offices) and should be considered before entering into transactions with us. Derivatives can be risky; losses can exceed your initial deposit. First Prudential Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd (ABN 16 112 600 281, AFS Licence No. 286354). ^Investment Trends CFD Report, May 2007