Difference Between ASX CFDs and OTC

The difference between ASX CFDs and OTC CFDs lies in the fact that the ASX handles CFDs much like they do shares. Fundamentally, all CFDs are the same because they are still contracts of difference. In this matter, there is no difference between ASX CFDs and OTC. The main difference between ASX CFDs and OTC ones is that the ASX provides a regulated CFD market with tool and services to help investors.

The first difference between ASX CFDs and OTC is in the manner that CFDs are traded. On the ASX CFD market, there exists a ASX CFD central market order book. All orders places by clients are inputed into the order book, which is available for viewing by the entire market. This difference between ASX CFDs and OTC increases the transparency on the ASX market. In congruence with this, all transactions, bids, open positions, offers and volume values are made available to the market. This difference between ASX CFDs and OTC CFDs makes for an advanced CFD market with features similar to those of the traditional stock market.

Another difference between ASX CFDs and OTC is regulation and risk management. The ASX CFD market makes use of SPAN. This is a margin calculation system which is used in CFD markets around the world. Likewise, the SFE Clearing Corporation guarantees all settlement obligations. Regulation by ASIC and the Reserve Bank of Australia (RBA) also contribute to the difference between ASX CFDs and OTC.