It should be remembered that these contracts for difference exist in a range of formats and share many of the weaknesses of margin loans - maybe more so in that they allow extreme leverage to the users AND as with Tricom and Opes Prime most if not all of the providers are not covered as far as their clients are concerned by ASX guarentee should the CFD provider fail.
With CFD's we have
a/ the capacity to short b/ often backed by bug ger all collateral c/ often offset by onmarket offsets d/ no requirement to be a sophisticated investor e/ no guarentee of the providers liabilities by the regulator f/ a regulator (the ASX) who are direct beneficiaries of any resulting trading volumes on the ASX as a result of the use of the product.
