A CFD (or Contract for Difference) is an agreement to exchange the change in price of a financial asset (such as shares, currencies, commodities) from the time you open the contract to the time you close the contract.
With CFDs you can capture trading opportunities from either a rise or a fall in any of the markets. Unlike traditional buy and hold strategies, you don’t need to wait for a rising market to place a trade. You can buy a CFD (go long) if you a looking for the price to rise, or you can sell a CFD (go short) if you a looking of the price to fall.
With CFD’s you can trade without having to own the underlying asset. And because you don’t need to buy the underlying asset, you can benefit from price movements with a fraction of the capital. CFDs are a leveraged product, so you trade with a margin where you only deposit a fraction of the full cost of the asset.
Unlike some derivative products like options and warrants, CFDs do not have a time limit. You can keep your CFD position open for a long as you want to take maximum advantage of the market movements. You are not forced to close a position because of an expiry date.
Full functionality CFDs are very flexible derivatives and can cover almost any financial asset. From your TD365 CFD account, you can access Australian, US, European & UK stocks, global indices, global currencies and a range of commodities.
By trading CFDs, investors are provided with a much greater variety of products to trade with on financial markets. Furthermore, CFDs are traded on leverage, which allows you to trade the markets with only a small portion of the total trade value.
Leveraging also presents the opportunity for potential gains to be increased as only a small portion of the value of the trade is required, however you are still provided with access to full market exposure.
Have you ever experienced the following situations?
A profitable trade quickly turning in to a losing trade due to a sudden spike in the spread, taking out your stop loss before moving towards your intended direction?
A news release is pending publication and suddenly the spreads widen, impacting heavily on your decision to execute your desired trade?
Unfortunately, the scenarios above can often be regular occurrences amongst traders whose CFD providers only offer variable spreads.
TradeDirect365 however offers tight, 24 hour fixed spreads, so our clients can be rest assured that they will not be influenced by any external market information, and will not be subject to large spikes in the spreads.
Our fixed spreads are some of the most competitive in the market, at just 0.8 pips, with NO commission on AUD/USD, EUR/USD and USD/JPY.
Fixed solutions may just be your solution to not only improved trading, but also increased returns.
Once the link has been activated, simply just fill in the details in the specified fields and an automatic email will be sent with an authentication code link. Once the link is activated, go to the login page and enter your login and password to access the trading platform. And you’re in!
The ASX (Australian Securities Exchange) charges a monthly fee for real-time price data for Australian stocks on a ‘per account’ basis. We apologise for having to pass on the ASX data fees. There are however, no other subscriptions required.
We have kept the cost we charge to an absolute minimum (AUD$27.50 per month, which is one of the lowest charges in the industry for live ASX data). However, this fee is waived if you execute 2 round turn trades (or 4 single legs) of any ASX stock CFD within the calendar month.
Subscribing to the ASX live data feed is not a necessity, however if you do wish to do so, you only need to subscribe to the months you want to receive the data for.
Note: We recommend subscribing to the live data feed at the beginning of the month as the ASX charge for the full month, irrespective of which day of the month you subscribe.
The foreign exchange market, also known as FX, forex or currency market, enables investors to purchase, sell, exchange and speculate currencies. These currencies are only exchanged in pairs and enables the conversion of currencies in international markets. The forex market is the largest and most traded financial market in the world.
Often the most commonly traded currencies are from countries that have respected central banks, a stable political system, and low inflation rates. These currencies are termed ‘major currencies’ which account for more than 85 per cent of all daily transactions. These include:
Essentially, the global forex market is available to trade 24 hours a day, 5 days a week. The availability of this market is a contributing factor to the popularity of FX trading as investors can respond immediately to currency fluctuations as a result of economic, political and social events at the exact time they occur, whether that be day or night.
The opening times of the major foreign exchange markets are:
When trading forex instruments, currencies are always traded in pairs, and therefore every forex position requires one currency to be traded short, and the other to be traded long. A long position is when one currency is purchased, with the aim to later sell it a higher price.
Therefore, those who trade using long positions benefit from a rising market due to this appreciation.
Trading with a short position is where an investor will sell a currency, in anticipation that the currency will depreciate in value. This strategy therefore benefits from a declining market.
The Forex Market does not have one central location, nor does it operate on an open exchange. Instead, the FX market is traded via an ‘Interbank’ or Over-the-Counter (OTC). This is due to the fact that there is no central exchange between banks, private investors, hedge funds or Governments and is instead transacted between two counterparts via an online electronic network or over the telephone.
There are a variety of ways to manage risk in forex trading, however the most common tools used are the implementation of a limit order or a stop loss order.
A stop loss order is an order whereby a specified position in the market is liquidated once it reaches a pre-determined price if the market were to move against an investors position which can assist in reducing potential losses.
A limit order is an order that restricts that maximum price you wish to pay or the minimum price you wish to receive.
Pip is the acronym for price interest point, which acts as a measurement to the amount of change in the exchange rate for a currency pair. A pip is the smallest movement in price that an exchange rate makes which is based directly on market convention.
As majority of prices for major currency pairs are made to 4 decimal places, the smallest change that these decimal places has on the total value of the currency will be the last decimal point, which usually is the equivalent of 1 out of 100, or 1 per cent.
For example, if the EUR/AUD moves from 1.4932 to 1.4933, that 0.0001 EUR rise in value is one pip.
There are several ways you can fund your account outlined below. Please note that due to money laundering regulations enforced by ASIC, we are unable to accept funds from any other source than the account holders own funds.
Bank Transfer / Wire
Our bank accounts are held at Westpac, Australia.
Please note: Finsa Pty Limited can only refund money to the bank account from which the funds were originally received.
Deposits: 24-48 Hours on business daysAustralian members can use BPAY to deposit funds into their account via internet or telephone banking.
To make a BPAY deposit, log into your financial institutions online or telephone banking portal and follow the prompts to make a BPAY Bill Payment. You will be required to enter the below Biller Code and Customer Reference number. For further assistance with completing a BPAY deposit, please contact your bank.
** Your BPAY Customer Reference number can be found by logging into your live account and selecting the ‘My Account’ button on top right of screen. From here select the ‘Transfers’ tab followed by the ‘BPAY’ tab. On this screen you’ll see your unique ‘Customer Reference’ number listed to use.
The Base Currency is the default currency of your account, which will be in Australian dollars.
Funds received in a different currency from your Base Currency will be converted into the Base Currency at our bank’s exchange rate.
When you trade a CFD that is denominated in a currency other than your Base Currency, all financing adjustments are made in that currency and then converted to your Base Currency at our current exchange rate.
The TradeDirect365 trading platform will allow you to use a Guaranteed Stop Loss Order (GS Order). You can nominate to use the GS Order when you open a trade.
A GS Order is a form of risk management that may assist you in limiting your losses if the market goes against your position.
There is a minimum charge to use a GS Order and a set distance where you can select your Stop Loss level.
A GS Order is an instruction by you to close a CFD position at the exact price that you set, even if our quote goes through that price. It is effectively a form of insurance that guarantees your exit price even when a market is experiencing high volatility or illiquidity and when the market gaps.
You may set a GS Order at the following times:
When you place a trade which then acts as a Guaranteed Stop Loss Order instruction to close the Open Position at a certain level; or
When you place an Order to Open which then acts as a contingent GS Order instruction once the Order to Open has been executed.
Please note that there is a minimum distance away from the quote that a GS Order can be placed. This information, along with GS charges, is set out in the Market Information Sheet.
Guarenteed Stop Loss Order Example:
The market price for BHP Billiton is 44.19-44.20. You believe that BHP Billiton will rise and so you Buy 100 CFDs at 44.20.
You are concerned about market volatility and wish to guarantee the level at which you will exit the trade if the market goes against you. You place a GS Order at 41.00. The cost of placing the GS Order is $13.26 (100 x 44.20 x 0.3%).
The price of BHP drifts lower and the market closes. Whilst the market is closed there is much negative sentiment in global markets and as a result BHP reopens lower at a price of 39.99-40.00. Your GS Order is executed at the guaranteed level of 41.00 and you incur a trading loss of $320 [(44.20-41.00) x 100].
If you had set a Stop Loss Order as opposed to a GS Order, the trading loss incurred in closing the position at the first available market price of 39.99 would be $421 [(44.20-39.99) x 100].
You can place or amend a Guaranteed Stop Loss Order at any time when the underlying market is open and any amendment to the level has to be at least the minimum distance (minimum, plus the market’s spread) from the current quote.
Guarenteed Stop Loss Order Fee?
For Share CFDs the guaranteed stop loss is 0.3% of the trade value.
For FX and Indices it is usually 3pts/pips added to the trade on position close.
For information on the GS Order cost, click the information button
The TradeDirect365 trading platform allows you to use a Trailing Stop when you place a trade. On the trade ticket, you need to tick the “Trailing” button if you wish to use the trailing stop feature.
Once you have ticked the “Trailing” box you need to set the distance you want your Trailing Stop away. If the market then moves in your favour, the Trailing Stop will move in that direction at a set size of increments.
Be aware that Trailing Stops are not guaranteed. Therefore, you may still be subject to slippage in volatile market conditions.
There are no extra charges for using a Trailing Stop.
Details of the minimum distances and set size of increments applicable to Trailing Stops can be found on the order section of the trade ticket.
Our trading platform is extremely easy to use, however we also have a detailed ‘How-To’ Guide which covers all aspects of the platform, including how to view, open, close and amend trades, charting, portfolios (watchlists), etc.
If you hold a long open position in a share CFD at the close of the business day before the underlying instrument goes ex-dividend then your account will be credited with 100% of the net dividend. You should note that we pay a net amount. This is net of any withholding taxes, local taxes or other charges that may apply from jurisdiction to jurisdiction.
For Australian share CFD transactions, you will not receive any franking credit benefit. If you hold a short open position in a share CFD at the close of business before the underlying share goes ex-dividend then your account will be debited to reflect 100% of the gross dividend. You should note that you would pay the gross amount. This includes any applicable withholding taxes, local taxes or other charges.
You are responsible for monitoring the margin required to maintain open positions at any one time.
The TradeDirect365 platform uses an automated risk management system to control client liability. This policy works as a margin call policy.
If the cash on your account and the value of your open positions (and amount of credit where applicable) falls below the margin required on your account, you will be required to fund the shortfall. In such circumstances the amount that you would have to pay would be sufficient to ensure that you have covered the margin required to maintain all of the open positions on your account.
We may contact you to inform you that you are required to make an additional margin payment, otherwise known as a margin call, but we are not obligated to do so. Our failure to contact you and inform you of a margin call in no way negates your obligation to monitor your open positions and pay any margin shortfalls when necessary.
As per the Client Agreement, we have the right to close out your open positions when the equity on your account [cash balance + open position P&L (+ credit where applicable)] falls to or below 20% of the margin required to support those open positions.