The Australian Stock Market (ASX) has actually just recently listed ASX CFDs for equities, products, currencies and indices. These CFDs correspond the CFDs provided by other CFD providers in the market, however there are a few differences in the way they trade.

How to Trade Contracts For Distinction Released by the ASX

ASX CFDs are traded through a broker authorized by the ASX to trade these derivatives. All orders are placed into a centralised order book which is run on a comparable basis to the share order book. Orders are filled out a centralised order book strictly on a price and time basis, where the first order in at a set cost gets top priority over any later order that is put.

Since the ASX provides a central market location and standardises the agreements it is possible to purchase an ASX CFD through one broker and offer it through another broker. When you use other providers as all positions opened with one supplier needs to be closed with the same supplier, this is not possible.

Ensured

In addition to this all ASX CFDs are guaranteed by the ASX and their warranty fund, so in case of a default by the broker they still retain their value. In the event of a default of another service provider there is no assurance that a customer will get their refund, though ASIC does need that all client money is held separately to the funds of the CFD supplier.

The ASX also offers an exchange for physical program where http://forexfundamentals.blog/how-to-make-money-trading/ CFDs issued by the ASX can be exchanged for the underlying share. This deal can be finished by the CFD broker as an off market transfer at similar pricing. When using other CFD companies, it is not possible to exchange Agreements for Difference straight for shares.

Drawbacks

One of the primary drawbacks with CFDs provided by the ASX, like other exchange traded items, is the absence of liquidity. When needed, the independent CFD Companies or over the counter (OTC) suppliers ensure that liquidity is readily offered so trades are carried out.

The other mechanics of ASX CFDs are extremely comparable to Agreements for Distinction provided by other companies.