Special mention: CFD providers
After assessing client satisfaction, costs and credit risk, 28E Capital comes out tops
For five years, Top Stockbrokers has provided a ranking of the best providers of contracts for difference (CFDs), a type of derivative that allows for low-cost, short-term leveraged trading. CFDs are a contract between two parties where one pays the other profits depending on the movement of a reference asset. So, for example, two parties can write a CFD on MTN, then pay each other the profit implied by the movement of the reference share. When we introduced this award in 2012, CFDs were extremely popular: they were the second-most traded instrument after equities. However, their popularity has waned, and this year exchange traded funds overtook CFDs in trading activity. This is a worldwide trend. CFDs are useful for shorter-term traders as they are generally cheaper to trade in and out of than normal shares, but they become more expensive the longer the holding period.
Determining the best CFD providers is a fraught conceptual problem — there are many issues that are importan...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.