CommSec CFD Trading Review (Discontinued)
Review
Important: CommSec ceased offering this product from July 19, 2019. Please refer to our CFD accounts comparison page for a list of other options.
The Commonwealth Bank confirmed the closure of its derivatives trading account CommSec CFDs from August in 2019.
A CommSec spokesperson said the change was part of the CBA's focus on "becoming a simpler, better bank" and that contracts for difference (CFDs) no longer align with its "purpose and strategy". The bank said they will no longer be an investment option through CommSec from 25 July 2019 and all CFD accounts will be closed by 16 August.
CFD trading accounts similar to CommSec
Trading CFDs and forex on leverage is high-risk and you could lose more than your initial investment. It may not be suitable for every investor. Refer to the provider’s PDS and consider the risks before trading.
Who is CommSec?
CommSec is one of the most trusted names in the Australian trading industry. After launching in 1995 and initially only offering the ability to trade Australian shares, Commsec has now expanded into the full featured trading institution that we see today. Clients can invest in CFD markets, international shares, exchange-traded funds (ETFs), receive margin lending and even fully administer their own self managed super fund (SMSF).
While you don't need to be a current banking customer of the Commonwealth Bank to open a CommSec CFD trading account, they do integrate single logins if you are. This allows current clients to easily view all of their accounts together and gives them the ability to flick between their Netbank and Commsec accounts without logging out. If you've experienced the confusing mess that flicking between multiple accounts and logins can serve up, then you'll know how handy this type of full online banking integration can be.
What are the key features of a CommSec CFD trading account?
If you feel that trading contracts for difference rather than investing directly with a CommSec share trading account, then a CommSec CFD trading account has a number of features worth considering. Most notably, using the Commonwealth Bank's vast market research department, the reports that they make available to CFD traders are second to none.
Some of the key features of a CommSec CFD trading account are featured below:
Research
Whether you have a CommSec CFD trading account or share trading account, you have access to a range of market insights to help you make better informed decisions. These include daily market reports and detailed market information from experienced analysts.
Access
Whether you're at your desk in front of a computer, or on the go with your phone, you always have access to your CommSec CFD trading account. You can place CFD trades through the CommSec online desktop platform, as well as on the surprisingly user friendly CommSec app which is available for both Android and iOS devices.
Trade types
A CommSec CFD trading account will provide you with a whole range of conditional order options to suit your trading needs. These include: market, stop and limit orders. A CommSec CFD account also allows for you to set a guaranteed stop loss and trailing stop levels in the market to help reduce your level of risk.
Demo account
If you're not sure whether CFD trading is for you, then CommSec offers a demo account for new clients to essentially try before you buy. This free 14-day demo login allows you to trial the features and services that a CommSec CFD account offers before you make a deposit and starting risking real money on a live account.
What CFDs can I trade with CommSec?
A CommSec CFD trading account gives you access to a whole range of markets. One of the great things about CFDs is that their synthetic nature allows for trading products to be made from a whole range of different market types. Individual shares, forex currency pairs, commodities and indices show just how diverse CFD trading can be.
Depending on your individual CFD trading strategy, you can choose to focus on a single market type, or spread your exposure across multiple CFD markets.
- Australian share CFDs. Over 600 Australian share market CFDs are available to be traded. If you can name a major company that's listed on the ASX, then it's more than likely you can find a CFD market to trade.
- International share CFDs. Just like ASX share market CFDs, you can also trade international share CFDs from company's listed on exchanges such as the NYSE, NASDAQ, LSE and the TYO. Think global giants like Amazon, Facebook or Sony.
- Indices CFDs. Instead of trading individual stock market CFDs, indices let you invest in a portion of an entire share market as a whole. The ASX200 and the S&P500 are two such popular indices that you may have come across.
- Commodities CFDs. If you're interested in trading gold, silver oil and a whole range of energies or metals, then commodities CFDs are for you. These highly volatile markets aren't for the faint hearted though and risk management is imperative.
- Forex CFDs. You have a wide range of forex currency pair CFDs to trade. Easily trade forex markets such as AUD/USD and USD/JPY, both long or short.
- Futures market CFDs. You're able to opening positions in a range of bond market and index futures, directly from your CommSec CFD trading account.
What account types are available with CommSec?
There are two types of CommSec CFD trading accounts that you have a choice between.
- The limited risk account. If you choose to open the limited risk account option, then all of your CFD trades will be required to have a guaranteed stop loss placed in the market. This is a feature that is excellent for new traders because regardless of market conditions, CommSec are essentially providing you with insurance on your position.Whether the market slips through your stop level or not, your losses on a limited risk account will only ever be limited to the initial deposit required to open the trade in the first place.
- The trader account. The second type of Commsec CFD trading account is called the trader account. This account type allows you to open CFD trading positions without having to set a guaranteed stop loss.In order to be eligible to open a trader account, you're required to prove that you're not a total novice. With no guaranteed stop, if the market slips down while you're in a leveraged position, you could potentially lose more than your initial deposit. It's for this reason that CommSec make sure you know what you're doing before allowing you to open a trader account.
What types of customer support is available from CommSec?
A CFD broker the size of CommSec, is naturally expected to have a high level of customer support access. On the back of the Commonwealth Bank's renewed focus on customer service, CommSec CFD traders definitely benefit in this regard.
If you have a CFD trading problem, then you have a number of choices when it comes to how you want to get in touch with CommSec.
- Frequently Asked Questions (FAQs). The CommSec FAQ page is highly in depth and allows you to search their database with a question that may have already been answered.
- Phone support. CommSec have two English speaking numbers, one for clients within Australia and another for clients overseas. They also have a Cantonese/Mandarin number for use within Australia.
- Email support. The support email address allows clients to articulate their problems via text in a longer format and questions are usually answered within one business day.
- Questionnaire form. Unfortunately this form doesn't lead to a live chat session. The questionnaire form on their support page feels a little bit redundant, especially because attaching any supporting screenshots or documentation will open up an email window anyway.
- Twitter support. CommSec have now opened a dedicated @CommSecSupport Twitter handle and goes some way to supplementing the broker's lack of live chat feature.
If you choose to open a CFD trading account with a massive brand such as CommSec, then you're going to expect a high level of customer support. This is one area that the company focuses on and clients are encouraged to take full advantage of the service they can receive.
What are the spreads, commissions and fees you can expect from a CommSec CFD trading account?
The fee structure of a CFD trading account is slightly different to those found on a regular share trading account. There are different levels of commissions that apply, depending on what type of CFDs you're trading.
You can find an outline of the fees found a CommSec CFD trading account below:
- Australian share CFDs - Minimum commission of AUD 10.00.
- UK share CFDs - Minimum commission of GBP 15.00.
- US share CFDs - Minimum commission of USD 15.00.
- Forex CFDs - No commission. The cost of trading is included in the spread.
- Commodities CFDs - No commission. The cost of trading is included in the spread.
- Indices CFDs - No commission. The cost of trading is included in the spread.
There are also a range of fees applied to CFD position that are held overnight and extra borrowing charges are applied when you short a share CFD position. Depending on your account type, it's also worth noting that guaranteed stop loss orders will also attract a fee of 0.3% of the transaction value.
How do I pay for trades on a CommSec CFD trading account?
You must have an acceptable Commonwealth Bank, bank account to serve for funding CFD deposits and withdrawals. But as you will need to open a CommSec share trading account to access a CFD trading account, you will have access to a Commonwealth Direct Investment Account (CDIA), cash settlement account.
When it comes to paying for each CFD trade that you place, they are paid for through either the spread applied between the bid and ask price (the slightly different price offered by CommSec for clients to buy and sell at), or through the commissions outlined above.
What are the pros and cons of using a CommSec share trading account?
Pros
- Trusted brand. The CommSec brand is an Australian banking and investment institution that almost everyone has heard of. They're a brand that can be trusted when it comes to trading CFDs.
- Number of CFD markets available. Access to more than 7,000 types of CFD markets provides a myriad of investment or hedging opportunities for investors and traders alike.
- Competitive commissions. CommSec fees start as low as $5 AUD per trade, which when compared to other CFD trading brokers of various sizes, is a highly competitive structure.
Cons
- CFD trading is risky. Trading CFDs involves a high level of risk. If you're choosing to trade CFDs over investing in shares, make sure you're fully aware of all the risks associated with CFD trading.
- Lack of live-chat support. Not having the ability to receive an instant answer to a short question is surprising when it comes to a company the size of CommSec.
How do I open a CommSec CFD trading account?
To open a CommSec CFD trading account, click the open account button on the CommSec CFD section of their website and follow the process you're presented with. You must first have a CommSec share trading account that settles to an acceptable bank account and pass a series of eligibility requirements that include:
- Be able to demonstrate trading experience (10 derivative trades or 20 equity trades in the last year).
- Have an acceptable Commonwealth Bank (CBA) bank account to arrange for CFD deposits and withdrawals.
- Be an Australian resident who is 18 years or older.
You should then prepared to have the following documentation handy:
- Name
- Address and contact details
- Valid email address
- Mobile phone number
- Tax file number
CommSec CFD trading account Frequently Asked Questions
Frequently asked questions
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