Parties to an ASX Listed CFD transaction
Traders of ASX Listed CFDs can either:
- Buy - undertake a long transaction; or
- Sell - undertake a short transaction.
When you first buy (or sell) an ASX Listed CFD it is called an opening transaction. If you then sell (or buy) an ASX Listed CFD to cancel existing bought (or sold) open positions, it is called a closing transaction. The market automatically recognises if a trade is an opening or closing trade.
Trading on SYCOM� is anonymous. This means the identity of the buyer or seller is unknown to the market.
After the trade occurs, the relationship between the two original contracting parties is broken with the SFECC becoming the counterparty for both buyer and seller. This process, called novation, is a key tool for managing counterparty risk and is a primary benefit of trading 'on exchange'.