CFDs

What are CFDs?

CFD stands for 'contract for difference'.

CFDs have become a popular way to trade shares on a geared (or "leveraged") basis. By entering into a CFD position over a particular stock, you can gain exposure to movements in that stock price, without owning the actual stock.

When trading CFDs, you generally require only a small percentage of the position value to trade either market direction. For example, if a share has a margin rate of 5%, you only need to deposit 5% of the total face value of the position.

Investors are using CFDs as an effective hedging tool, attracted by the many benefits CFDs offer, their simple and transparent structure as well as their risk management capabilities.

>> Learn more about hedging

Macquarie CFDs are available on over more than 500 listed ASX listed securities. View the complete list of CFDs currently available.

Why CFDs?

• Integrated with your Prime Facility
• Margin Offset 
• Direct Market Access
• Guaranteed Stop-Loss protection
• Open or close a CFD position from $20

Integrated with the Macquarie Prime Facility

Macquarie CFDs are fully integrated within the Macquarie Prime facility which offers an all in one facility for online trading, gearing, risk management tools and a cash account. Your CFDs and share positions can be held and transacted on the one platform. This integration offers you the advantage of margin offset.

Margin Offset

CFDs allow you to protect your share positions with short CFDs. If you hold a long share position in your Prime Facility, you can hedge that position with a short CFD trade. The hedge can be tailored to the exact number of shares that you own.

Generally, you will not require further margin deposits for the short CFD position.^* Provided you have elected to open a loan facility, which is optional. This is due to cross-margining because your shares effectively act as margin for the short CFD position.

Direct Market Access

CFDs are offered via the Direct Market Access ("DMA") model. We believe DMA offers you the most transparent pricing and cost structure.

Guaranteed Stop-Loss protection

Macquarie's unique Guaranteed Stop Loss ("GSL") protection shields you against unexpected adverse share price movements during the GSL period. A GSL guarantees a worst case exit price for a CFD position during the GSL period and can allow you to increase your leverage.

Trading Fees from 0.07%^

CFDs are a relatively low cost trading vehicle with trading fees starting from $20 to open or close a CFD positon.

* Provided you have elected to opem a loan facility, which is optional.

^ Subject to $20 minimum trading fee

Investments made through your Macquarie Prime Facility can be highly geared and can carry a high level of risk, and you may lose more than the capital you invested. None of Macquarie Bank Limited ABN 46 008 583 542 ("Macquarie") or any member of the Macquarie group of companies guarantees the performance of any investments made through your Macquarie Prime Facility. Your potential liability under the Macquarie Prime Facility is not limited to the balance deposited in your Prime Account or the value of Financial Instruments held through the Macquarie Prime Facility and we may ask you to pay amounts in excess of these amounts to cover any outstanding monies, especially where you have a Short Position or are leveraged (eg. have a Loan Facility or hold CFDs). 

Consider carefully whether a Macquarie Prime Facility issued by Macquarie Bank Limited ABN 46 008 583 542 and any investment you make in or through that facility is appropriate for you; talk to a financial adviser; and before investing read the relevant product disclosure statements and other transaction documents. Macquarie does not give tax advice. How tax laws affect you depends on your individual circumstances. You should seek your own professional advice. 

The information contained in this website is prepared in good faith with all reasonable care. However, certain parts of the material may have been obtained or based on information from third parties which may not have been checked or verified. To the extent permitted by law, Macquarie accepts no responsibility for errors or misstatements, negligent or otherwise in the information provided. 

The distribution of this information in jurisdictions outside Australia may be restricted by law and persons into whose possession the information comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of an applicable jurisdiction.  

Information is current as at 13 March 2009 and may change without notice. 

Visit macquarie.com.au/au/mbl_financial_services_guide.htm to view our Financial Services Guide.