CFD, Contracts for difference. The house (CMC et al) have set up their own betting ring. You as a mug punter have made a bet for the stock to go one direction, the bookie (CMC) hedges this bet against the up side, ie. buys an option contract to reduce the houses exposure. In the mean time he makes money from brokerage(goes directly to profit because it does not go through the ASX platform but thier own) and money from investing the money you have with them.
What happens if they collapse? Well if you went short and made a heap of cash you would still be an unsecured creditor as the house has no money to pay you out. If you went long and want to get to your money, you can't because you own nothing except the debt the house owes you. Again unsecured creditor.
So who gets the money? 1)Recievers 2)Employees (yes that includes the directors) 3)Secured creditors (ANZ et al) 4)You 5)Share holders
Damn sounds like a whole lot of mess to me.
ASX Price at posting:
0.0¢ Sentiment: None Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)