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Contracts for Difference (CFD) Market Outlook

Since being introduced to retail investors in UK in 1998, CFDs have witnessed a fast international proliferation. Originally, these over-the-counter financial instruments were developed to avoid ‚stamp duty‘ (tax). Subsequently, the global market success has been based on a variety of competitive product advantages, in particular sophisticated trading platforms. Moreover, CFDs are easy to understand and transparent derivatives which enable cost efficient and yet tailored trading strategies for a broad range of underlyings (shares, indices, foreign currencies, commodities, interest rates, etc.)

In a current market study, we find that even mature markets offer attractive growth potential for incumbents and new entrants. In addition, further countries provide promising conditions for the introduction of CFD trading. According to industry experts, the global transaction volume of CFD trades is expected to top 3 trillion Euro (notional value) in 2012. In the past 5 years the transaction volume increased by an average annual growth rate of 20 %. Please find an excerpt of the study results in the download section on the right side.

As a management consultancy with a strong focus on implementation projects, METIS assists clients in all phases of launching a CFD market offering – starting from strategy development to functional specification, monitoring of application development/integration, process design to a successful ‘go live’. Our modular service offering can be tailored to the individual situation and needs of your financial institution:

  • Strategic Assessment: Evaluate the business potential, decide on the preferable business model, conduct feasibility study and calculate business cases
  • Program Management: Establish an effective content driven Program Management Office (PMO), assure reliable planning and ongoing monitoring, provide functional sparring, prioritisation and risk management as well as ongoing reporting and communication
  • Product and Process Design: Detail product features/services, determine pricing model, specification of functional requirements (business concepts & functional specification documents), elaborate and document processes and organisational structure
  • IT Implementation: Assess IT requirements and select (outsourcing) partners, transfer functional into IT specifications (requirement specification document, IT concepts), steer implementation process, prepare and conduct testing

For further Information please do not hesitate to contact:

Andreas Bornemann
Telefon:         +49 89-520389-20
Telefax:         +49 89-520389-29
E-Mail:           a.bornemann@metis-mc.com