Working with CFDs – A Client Case Study

Because no consensus for CFD settings exists, it’s important to have a plan when introducing this product or making changes to an existing configuration.

From a technical standpoint, working with CFDs can often feel like the the proverbial square peg in the round hole. The biggest reason is that unlike forex, there is no standardization regarding lot sizes, margins, and leverage (we’ve looked ourselves and found no consensus). When it comes to FX though, everything is quite standard. In MT4, for example, a single unit represented by the numeral 1 equates to 100,000. Whether it’s GBP/JPY, CAD/CHF or EUR/USD, 1 = 100,000.

This poses a challenge for brokers who wish to adjust existing CFD settings, an experience we’ve dealt with on several occasions with partners who use our IT services. Why do CFDs pose so many technical challenges? What many don’t realize is that much time and effort goes into the background when configuring CFD settings. Just a few considerations are P&L, margin, and the lot size settings we referred to above.

Because of the considerations we’ve outlined, it is highly recommended that a standardization is planned out before the product launch. Once trading starts, it could take literally weeks to alter the settings in a way that doesn’t disrupt or severely impact service. Other considerations a broker should make when launching CFDs involve holiday hours, which are far more frequent than forex. Additionally, rollover charges also need to be reviewed as there is no consistent standard here either.

CFDs are a much demanded product, however, they greatly increase the technical complexity of a broker’s set up. Because Atomiq Software specializes in MT4 server management for brokers, we are an excellent partner for those looking to launch this the first time or adjust settings without headaches. Feel free to contact us for more details related to our services.

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