Contracts for dummies? The performance of investors in contracts for difference

Lee, AD; Choy, S

Contracts for dummies? The performance of investors in contracts for difference

Lee, AD

Choy, S

Permalink

Publication Type:: Journal Article
Citation:: Accounting and Finance, 2014, 54 (3), pp. 965 - 997
Issue Date:: 2014-01-01

Open Access

Copyright Clearance Process

Recently Added
In Progress
Open Access

This item is open access.

Adobe PDF

Download Accepted Manuscript VersionAdobe PDF (378.83 kB)

View on publisher's site

View statistics

Full metadata record

Field	Value	Language
dc.contributor.author	Lee, AD https://orcid.org/0000-0001-5984-8688	en_US
dc.contributor.author	Choy, S	en_US
dc.date.issued	2014-01-01	en_US
dc.identifier.citation	Accounting and Finance, 2014, 54 (3), pp. 965 - 997	en_US
dc.identifier.issn	0810-5391	en_US
dc.identifier.uri	http://hdl.handle.net/10453/77454
dc.description.abstract	© 2013 AFAANZ. Investors widely use contracts for difference (CFDs) to leverage and short sell underlying financial assets. We investigate the after cost performance of investors in Australian Securities Exchange listed share CFDs, and find that market order CFD trades earn small positive returns at the daily horizon, with negative returns reported for one month to one year horizons due to financing costs. Market orders also net sell positions, which suggests that investors use CFDs for shorting opportunities. Overall, we find that liquidity demanders in CFDs obtain favourable execution, which is inconsistent with the view that CFDs are used by naive individuals.	en_US
dc.relation.ispartof	Accounting and Finance	en_US
dc.relation.isbasedon	10.1111/acfi.12018	en_US
dc.subject.classification	Accounting	en_US
dc.title	Contracts for dummies? The performance of investors in contracts for difference	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	54	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Finance Discipline
pubs.organisational-group	/University of Technology Sydney/Provost
pubs.organisational-group	/University of Technology Sydney/Provost/Jumbunna
pubs.organisational-group	/University of Technology Sydney/Strength - QFRC - Quantitative Finance Research Centre
utslib.copyright.status	open_access
pubs.issue	3	en_US
pubs.publication-status	Published	en_US
pubs.volume	54	en_US

Abstract:

© 2013 AFAANZ. Investors widely use contracts for difference (CFDs) to leverage and short sell underlying financial assets. We investigate the after cost performance of investors in Australian Securities Exchange listed share CFDs, and find that market order CFD trades earn small positive returns at the daily horizon, with negative returns reported for one month to one year horizons due to financing costs. Market orders also net sell positions, which suggests that investors use CFDs for shorting opportunities. Overall, we find that liquidity demanders in CFDs obtain favourable execution, which is inconsistent with the view that CFDs are used by naive individuals.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/77454