Global Board of Trade launches Contract for Difference
The Global Board of Trade (GBOT), the first international multi‐asset bourse from Mauritius, has successfully launched Contracts for Difference (CFDs).
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.
The launch of CFDs on GBOT Tuesday, May 7, 2013 in Mauritius, makes it the first exchange in Africa and second in the world to introduce CFDs.
CFDs are leveraged instruments that allow traders to hold large positions on commodities, currencies, equities and indices with a small margin deposit, while 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.
GBOT CFDs will replicate the spot price performance of underlying assets and give traders and investors easy and seamless exposure to US dollar 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).
Small sized products are launched with the objective of taking markets to the masses by allowing the investor to trade with as low as US$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.
In a statement at the launch, Ms. 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.”
She said “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. The overall result will be enhanced liquidity and buoyancy in the market, thereby attracting more international buyers and improving the visibility of our jurisdiction.”
Mr. Jignesh Shah, Chairman & Managing Director of Financial Technologies Group, India and Vice-Chairman of Global Board of Trade in an address said: “The launch of CFDs on GBOT reinstates our vision of taking Wall Street to the Man on Street. We have been successfully implementing our model of organised markets for masses from Asia to Middle-East and are committed to lead the development of African Financial Markets with GBOT.”
Commenting on the launch of CFDs, Mr. Rinsy Ansalam, MD & CEO of GBOT, said: “A key ingredient towards a vibrant capital is product innovation and the launch of CFDs is yet another initiative of GBOT that will democratise markets and allow the smallest investor to participate.”
He added that “The target market range of this segment includes fund houses, traders, students, house wives and people with no finance background. As a CFD pre-launch initiative, GBOT has conducted over 50 workshops to educate over 500 participants on its features and advantages. Through education, we are simplifying financial markets for masses.”
By Edmund Smith-Asante