Global Board of Trade, the first international multi -asset bourse from Mauritius has successfully launched Contracts for Difference (CFDs). The launch of CFDs on GBOT makes it the first exchange in Africa and second in the world to introduce CFDs.
GBOT CFDs will replicate the spot price performance of underlying assets and give traders and investors easy and seamless exposure to USD denominated currencies, commodities, equities and indices. The introductory CFD contracts on GBOT will include GOLD (1 Troy Ounce), WTI Crude Oil (10 Barrels), EUR/USD (1000 Euro) and GBP/USD (1000 GBP). The small sized products are launched with the objective of taking markets to the masses by allowing the investor to trade with as low as USD 20. As the market matures, GBOT will scale up its operations along with its CFD product portfolio to suit the preferences of its members and aid their business expansion.
By definition, Contract for Difference (CFD) means a standardised derivative traded on GBOT where a buyer and a seller agree to exchange the difference in value of a particular underlying between the time when the Contract is opened and when it is closed. CFDs are leveraged instruments that allow traders to hold large positions on commodities, currencies, equities and indices with a small margin deposit. Traders can take advantage of both rising and falling markets. The standardised GBOT CFD contracts will offer enhanced transparency, no counterparty risk, high return potential, low entry threshold and no levy of overnight rollover and open interest charges.
Clairette Ah-Hen, Chief Executive of Financial Services Commission, Mauritius said: “The launching of CFDs represents yet another milestone in our financial services landscape as it will enable both local and overseas investors, be it individual or institutional, to diversify further their investments. CFDs may bring more value-addition by enabling investors to take advantage of both rising and falling share prices. Small investors too will be able to trade on CFDs, given the low capital entry requirement.
