The diversification of brokers into the fifth generation of the MetaTrader platform are slowly opening the doors to new asset classes for retail traders. The latest broker to branch away from the more traditional CFDs instruments is Pepperstone.
The company officially unveiled today that it is going to deliver to its clients CFDs on US stocks. The move follows up on several brokers diversifying into stocks in one way or another over the past several years. While more companies are beginning to offer to their clients zero-commission shares trading, Pepperstone is banking on after-hours markets to attract more clients to its CFDs.
The company will be offering to its clients access to pre- and post-market trading hours, thereby offering a lucrative proposition for news-driven traders. Since most of the earnings reports in the US are published either before or after the regular market hours, Pepperstone’s approach is giving its clients access to be more pro-active when trading single stock CFDs.
The downside of the extended market hours sessions however is poor liquidity, which can sometimes result in poor execution of customers’ orders. The first batch of stocks which Peppersotne is focusing on are the 60 most traded companies in the US.
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The names include the hottest tech shares, like Google, Amazon, Apple, and Tesla, as well as industrial giants like Alcoa, Caterpillar and Chevron. The default margin rate on the product sits at 5% or 20:1. That said, the levels differ depending on the jurisdiction, where the clients using the product are based.
Pepperstone states that it won’t be charging its clients additional data fees for single stock CFDs.
Commenting on the launch, the Pepperstone Group CEO, Tamas Szabo, said: “Our focus as a business is to continue to innovate and respond to what our clients want and provide assets that offer our traders the opportunity to access new markets.”
The extended-hours stock CFDs in the US are complimenting the company’s already widely popular extension of market hours on the German Dax and the Dow Jones Industrial Average. Clients of the company can access the new product via the market watch section of their MT5 platform.