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The CFD Trading Centre in Active Trader Links Directory

CFD Trading is a very new financial instrument. First conceived in the 1990s, it has seen incredible growth in the last decade and a half. CFDs were created in London by a derivative brokerage firm called Smith New Court which was later bought out by Merrill Lynch. Smith New Court had some hedge fund clients who were looking for a way to short sell the market while using high leverage in order to place larger bets and CFDs provided the answer. It also gave these large hedge fund clients the ability to avoid stamp duty, similar to the members of the London Stock Exchange. This was the primary market for CFDs for the better part of that decade, until the technology boom of the late 1990s began. The technology boom provided a large population of new, volatile stocks that were perfect for CFDs. The rate at which price changes were occurring in these tech stocks made long term investment unnecessary, and allowed market traders to speculate on the direction of stocks using CFDs. The first company to bring CFDs to the private investor was GNI, with their creation of an online trading system called GNI Touch. This allowed private investors and small investment companies the ability to trade on the London Stock Exchange without having direct access to it. It is now estimated that as much as 25% of Britain’s stock market turnover is related to CFDs. They are also beginning to span the globe reaching markets such as the Toronto Stock Exchange in Canada and the Stock Exchange of Singapore. CFDs provide an inexpensive way of trading on large amount of stocks without having to bear the burden of actually buying and selling the underlying stock. CFD brokers have created a market where an investor can earn money on a stock that goes up or down. Finally, CFDs have eliminated the necessity to have access to the live markets in order to speculate on the direction of stocks.

Website: http://www.thecfdcentre.com/