I have been buying and selling CFDs in Australia since they were initially launched in 2003. Over this period I've traded with all the main CFD brokers in Australia first hand. When speaking to groups of traders at investing expos and seminars all-around Australia I regularly get asked who's the best CFD provider? I wrote this review to help answer this million dollar question.
This review covers all the major CFD providers in Australia that I've dealt with first hand, whilst writing this review I took into consideration four major points that as a professional trader I believe are the critical requirements to think about when deciding on a CFD provider, these are:
1. Customer Service
2. Platform stability and ease of use
3. Product range
4. Pricing
You must to note that there are CFD provider evaluations performed by a number of internet sites and magazines in Australia many of which are biased with the winners frequently being selected by journalists not traders and determined by the amount of cash spent on advertising and marketing in the magazine or on the website that carried out the review. Only real traders with real life experiences are able to conduct a fair an unbiased review.
The main players in the CFD industry in Australia are:
· IG Markets
· CMC Markets
· International Capital Markets (IC Markets)
· MF Global
I didn't conduct a review of Etrade or Comsec as these companies are simply resellers of MF Global’s CFD offering.
In this review I talk about my real life experiences with each of the providers mentioned above whilst considering the 4 essential elements that I regard as vital when choosing a CFD provider.
IG Markets
Customer Service: I have had an account with IG Markets for the last three years I use this account as my backup account. Over this time I've found that their customer service has declined significantly, in-fact at on one occasion I was unable to get in touch with a dealer as they were all busy. On the whole I regard their customer support to be inadequate and would not recommend them.
Platform stability and ease of use: I use both their Pure Deal and L2 platforms and have had troubles with both. Recently I experienced the problem of being unable to view my positions and free equity preventing me from trading all morning. I wouldn't regard either of their platforms as suitable for a professional trader.
Product range: IG Markets has a fantastic product range, this is unquestionably one of their strong points. One thing I would say is that if you're looking to trade CFDs on exotic futures contracts and foreign exchange pairs IG Markets is certainly not the CFD provider for you as they have a tendency to stick to a fairly mainstream offering.
Pricing: On Australian share CFDs IG Markets has competitive pricing, their minimum commission on share CFDs is low and their spreads are tight on the main currency pairs, however if you're an active trader and are looking for volume discounts don’t bother trying to negotiate with IG Markets their commission schedule is fixed.
CMC Markets
Customer Service: Out of all of the CFD providers that I've ever traded with I've found CMC Markets to have the worst customer support, with CMC Markets your problems start as soon as you call them up for support and choose a number from 1 to 10 just to talk to someone. I've also found their support staff to possess only a basic understanding of their platform. General queries and problems frequently must be escalated to more senior staff, not the kind of support a professional trader demands.
Platform stability and ease of use: In recent times the stability of their trading platform Market Maker has improved drastically, however the trading platform still lacks functionality such as course of sales for share CFDs, something a professional trader demands.
Product range: CMC’s product range is extensive and not dissimilar to that of IG Markets however it's worth noting that CMC provides an exceptional variety of CFDs over exotic futures contracts and currency pairs, precisely what is missing from IG Markets product offering.
Pricing: Like IG Markets CMC markets offers good entry level pricing but lacks the pricing flexibility required when it comes coping with high volume traders.
International Capital Markets (IC Markets)
Customer Service: I had not heard about these guys until about one year ago. After calling them up and talking to one of their sales staff I thought I'd give them ago. My experience so far has been second to none. Their customer service is top notch. In spite of the size of my trading account I have my very own dedicated account manager that understands the market and what I want, this is very different to the call centre operations of IG and CMC Markets.
Platform stability and ease of use: They provide a number of trading platforms to cater for a varied range of customers. They have got a trading platform for beginners, intermediate and advanced traders. As I'm an experienced trader I chose their advanced trading platform Pro Deal which provides all the functionally an experienced trader needs. Though I can't speak for all of their trading platforms their advanced trading platform continues to be trouble free and I would unquestionably recommend it to anyone.
Product range: All of the products missing from the two major providers such as futures, DMA functionality and exotic currency pairs are offered by these guys. Whilst writing this review I couldn't think of a product that these guys could not offer.
Pricing: Like most of the CFD providers reviewed these guys offer good entry level pricing, however the difference with these guys is that they also have a flexible pricing structure for frequent traders. As I am an active day trader they were prepared to drop their minimum charge and offer me a commission rate of 0.04% on DMA CFDs, the very best rate offered to me by the other providers was 0.08%, they are 50% cheaper!
MF Global
Customer Service: At the start I believed that these guys would take the cake on the customer service front, however unfortunately their high level of service did not last for more than one week after funding my trading account, this was quite surprising and not something that I would have expected. Once I was up and trading these guys did not want to know me, this type of customer service leads me to rate them as the worst of the lot.
Platform stability and ease of use: These guys offer one platform for CFDs, webIRESS. Even though webIRESS is a superb trading platform they don’t offer anything else, in comparison to IC Markets who offer webIRESS along with many other platforms. Their offering is basic and not what a professional trader demands.
Product range: MF Global can offer you all the futures contracts you could ever ever think of however when it comes to forex, CFD and share trading they cannot compete with the likes of IC Markets. If it’s only futures you want than these are the guys to speak to, but for CFDs your should give them a miss.
Pricing: The entry level pricing for CFD trading at MF Global is pricey, they do however offer packages for frequent traders with discounts right down to 0.08%, this is still a far cry from the 0.04% offered by IC Markets. Even though the CFD commission charges are costly I'm sure that if you were only trading futures you could possibly get some great pricing from MF Global
Conclusion
As an expert trader I am quite demanding in what I expect from my CFD provider, I'm sure that this is not the norm for many traders. There was really only one CFD provider from those reviewed that was able to give me what a professional trader would demand, the rest of the CFD providers have great offerings that would suit an normal trader but when pushed to their limits might falter, this is something an experienced trader can not afford to have happen when capital is on the line. Aside from my primary preference IC Markets I would chose IG Markets as my backup, regardless of their shortfalls they do have relatively good trading platform along with a broad product range. There's however a big difference in customer support and pricing of IG Markets offering compared to my primary choice, IC Markets.
Author Resource:
Matthew Jones is a professional CFD trader with over 15 years experience in the market. Matthew has been trading CFDs via the web since their introduction to Australia in 2003. Matthew has published critiques on a number of CFD providers for a variety of trading magazines and online publications. Matthew has also held several seminars on day trading and scalping CFDs for a living.
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