MF Global

The information in this publication is taken from sources believed to be reliable. It is, however, intended for purposes of information and education only and is not guaranteed by MF Global Australia Limited as to accuracy, completeness, nor any trading result. The Rules and Regulations of each exchange should be consulted as the authoritative source on all current/existing contract specifications and regulations.

CFD trading involves the risk of loss. People can and do lose money trading CFDs.

CFD trading is not for everyone.

CFDs were first introduced by the derivatives desk of Smith New Court in the early 1990s. The advantages of CFDs was that it allowed the firm’s large hedge fund clients to be able to easily short the market whilst being able to benefit from the leverage as well as the stamp duty exemptions enjoyed by members of the London Stock Exchange. It also gave clients the advantage of not having to physically settle security transactions and also clients avoided the need to have a stock borrowing capability when shorting the stock.

In 1998, GNI Touch (now part of MF Global Group) adopted the product for the private client market. GNI offered the CFD product alongside an innovative trading system, which provided clients the ability to trade via the Internet directly into the London Stock Exchange.

When the Financial Services Reform Act came into effect in 2002, it opened the door for international firms to offer products previously unseen in Australia, such as CFDs. Since their introduction in Australia, CFDs have become one of the fastest growing financial products to enter the Australian market place.