Multi-asset brokerage ActivTrades has added CFDs on Exchange Traded Funds (ETFs) to the existing range of asset classes available to trade. The new instrument is part of a wider offering from the FCA-regulated firm that includes Forex, contracts for difference (CFDs) and spread betting.
This launch marks another entry into the ETFs market by a UK-based broker which is an exciting development for the asset class that offers low-cost diversification and arbitrage options for investors. With typical FCA diligence, ActivTrades should have ticked all of the boxes in the design and implementation of its offering.
Often promoted as cheaper and better than trading in future markets, CFDs on ETFs have become one of the popular investment vehicles for retail traders. The asset class typically tracks a stock market index and trades on an exchange so that it allows individuals trade a basket of securities in a single transaction. It also creates the conditions for retail investors to trade the underlying asset with much better control of their exposure to risk margin.
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ActivTrades says the launch is a natural progression for the business, adding it will enable its clients to invest directly in ETFs with favorable terms compared to those offered on the underlying markets. These terms include much lower margin requirements, trade sizes, and tick values as well as no financing costs, exchange fees or minimum commissions.
ActivTrades has recently embarked on a number of initiatives for its clients. Finance Magnates last reported on ActivTrades back in December when the FCA-regulated firm launched a list of new contracts, including Bitcoin, Litecoin, and Ethereum. The company is offering the new crypto CFDs via its proprietary trading platform ActivTrader, MetaTrader 4 and 5 on desktop, tablet and mobile.
ActivTrades has also taken additional steps to safeguard its clients, introducing a new threshold of insurance up to 1.0 million pounds $1.35 million), which vastly exceeds the UK’s Financial Services Compensation Scheme (FSCS), making it one of the highest levels in the industry.
Commenting on the product release, Andrea Draghi, Risk Director for ActivTrades, said: “We’re delighted to introduce exchange-traded funds to our customers. This will allow them to balance the risk profile of their trade and diversify across sectors.”