Despite the Australian Securities Exchange (ASX) recently launching a contracts for difference (CFD) service, a survey has shown that the enthusiasm for CFD trading has dropped significantly.
According to Investment Trends’ 2008 Contracts for Difference Report, the number of CFD traders in Australia decreased from 31,000 in April 2007 to 26,000 in August 2008.
The annual survey also found that the average CFD trade size had fallen from $55,000 to $41,000, but of those people still trading, the frequency of their trades had increased.
Investment Trends added that there had only been a modest uptake of ASX’s CFD service, representing 1 per cent of the total volume of CFD trades.
Investment Trends principal Mark Johnston suggested CFD providers focus on attracting former traders back into the market once the volatility had settled.
In terms of market share, CMC Markets is Australia’s largest CFD provider with 32 per cent of traders using it as their main provider, followed by IG Markets with 26 per cent and MF Global with 17 per cent when taking into account its ETrade offering.
The online survey attracted 8,000 investors, including 2,000 CFD traders.
