Platform opens contracts on top NZ stocks to world

Trading platform operator CMC Markets has launched share contracts over the top 45 stocks listed on the NZX.

The company said the new contracts for difference (CFDs) would give its clients around the world access to local stocks including Fletcher Building, Spark, Meridian Energy, Fisher & Paykel Healthcare and Air New Zealand.

CFDs allow traders to utilise leverage - they don't provide the full cost of the trade - to speculate on price movements in stocks or hedge existing positions.

The spread on the contracts would mirror underlying bids and offers in the market and provide traders with the ability to go long, meaning they expect the price to rise, or short, betting that the price will fall, CMC said.

Such trading carries a high level of risk as it is possible for investors to lose more than their initial deposit and be required to make additional repayments.

CMC Markets New Zealand general manager Chris Smith said the move into NZX contracts had been driven by client demand.

"Clients, particularly those focused on equities, want access to all global markets including New Zealand," he said.

"We have over 10,000 products on the platform after recently adding several thousand new equity CFDs."

Given the interconnected nature of global markets, Smith said traders in New Zealand CFDs should monitor overseas markets closely.

"New Zealand is an exciting market to be involved in as it's heavily affected by market activity in the US, Asia and Europe on a daily basis plus the addition of many new listed companies," he said.