FAQs

1. What is DMA?

DMA stands for Direct Market Access. It means that when you place a share CFD order, a corresponding hedge order is placed on the underlying stock exchange (i.e. ASX). When that order is executed your CFD order is automatically filled.

Click here for more information on Direct Market Access (DMA).

2. Are CFDs like options and warrants?

While options and warrants are leveraged instruments they are quite different from CFDs in several key respects. Options and warrants have an expiry date, a fixed exercise price, you do not receive adjustments, price movements are not generally equal to actual changes in the underlying share price, and they usually lose value every day (often referred to as time decay). Warrants in Australia cannot be sold short and so the price is often controlled by the warrant issuer. On the other hand the price of CFDs behave precisely in the same manner as the underlying security.

Click here for more information on CFDs

3. Can I trade CFDs on all stocks in the Australian market?

Yes you can now trade a CFD on every stock listed in Australia. Approximately 600 stocks require a margin starting from 5%, whilst the balance of the stocks on the ASX are margined at 100%.

4. Do I have voting rights as with shares?

No, you do not have any voting rights when holding a CFD position.

5. What about dividends and corporate actions?

If you hold a long position your account will be credited with the gross unfranked amount for that stock on the day following the day the stock goes ex-dividend. If you hold a short position your account will be debited with the dividend amount in the same manner. CFDs do not provide any benefit from imputation credits.

6. Is there a time limit to holding CFDs?

There is no expiry date so your holding period is unlimited providing you have sufficient margin to hold the position open.

7. What prices do I receive when I trade CFDs?

The price of the CFD is always the same as if you had bought or sold the underlying stock on the cash market.

8. Can I place orders outside of market hours?

Yes, orders can be placed at any time when the market is closed but they will not physically be placed into the underlying market until the ASX opens for electronic order placement which is 7am (AEST).