Trade Ethereum Online

Trade Ethereum CFDs with an Australian Regulated Broker

Trade Ether CFDs and speculate on the success or failure of Ethereum technology. Ditch the digital wallet and enjoy fast execution trading via a multi-asset brokerage based in Sydney and regulated by ASIC (Australian Securities and Investments Commission).

A Primer on Ethereum and Ether

Ethereum is a decentralised internet and app system which is widely used for sending and receiving cryptocurrency, although it also performs other core functions.

Ether however is a blockchain-based cryptocurrency. Frequently you will see ether and ethereum used interchangeably, although technically ether is the cryptocurrency which requires ethereum software to run.

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Ethereum vs Bitcoin
Ether is currently the second largest cryptocurrency in the world by market capitalisation, compared to Bitcoin. Being they are the two largest cryptocurrencies by market cap, their direct comparison is no big surprise. Yet whilst they share many similarities, there are also distinct differences between the two.

Both are decentralised cryptocurrencies which are not governed by a central bank of government, and both rely on blockchain technology to function, stored in digital wallets and traded via an online exchange.

Yet the overall aim of Ethereum differs from its supposed rival. Whilst Bitcoin intends to disrupt banking and daily transactions, Ethereum was created to help replace 3rd party internet companies which store data, transfer financial data or monitor complex financial data. From this angle Ethereum can be seen as a complement to Bitcoin.

Just some examples of the intermediaries they wish to replace include Google, PayPal and FaceBook. Each day millions of people happily share their personal and financial information with such companies, and those details are stored on their servers or in the cloud. Yet in recent years such companies have been accused of abusing their power by censoring or sharing information, or vulnerabilities of personal information have been exposed as their servers get hacked and valuable information has effectively been lost or stolen.

Ultimately the idea of Ethereum is that no single entity would own or control personal information, although a nominal fee would be incurred by the user to pay for this security. And such payments would of course be made in Ether.

 

Ether Futures:
Due to the rising demand of cryptocurrency trading by professional money managers and institutions, it was only a matter of time until an Ether futures contract was created.

Professional traders of size require the need to trade long and short and to hedge their digital wallets, and futures contracts provide that ability. Whilst there is currently no US regulated exchange that offers Ether futures contracts, professional money managers can access Ether futures on overseas crypto exchanges such as OKEx, Huobi and Binance.

That said, it has been reported that of October 2020 that CME are considering launching an Ether futures contract, and that would certainly be beneficial for the trading community as higher volumes of a product generally result in lower transaction costs.

Still, futures contracts can be very expensive vehicles to trade so may be out of reach for the typical retail trader to participate in. This is where CFD trading comes in, which are a more easily accessible form of entry for retail traders to speculate on Ether price fluctuations.

How Does Trading Ether CFDs Work?

Whilst CFD traders can participate in regular market action, they do not become the owner of the underlying market as CFDs are a form of derivative. So, in the case of Ethereum CFDs, the trader is not purchasing the digital coin Ethereum, yet they can enter long (bullish) and short (bearish) positions.

Furthermore, as our ethereum CFD is a leveraged product, low margin requirements mean full contracts can be purchased at a fraction of the cost of the underlying market.

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Long example: Ether (ETHUSD)
A trader buys 50 contracts of ETHUSD (50 Ethereum coins) at USD $463

  • If the prices rise to $500 the trader could exit for a profit around $1,850
    • (# contracts x contract size) x (exit price – entry)
    • (50 x 1) x ($500 – $463)
  • If prices fall to $445 the trader could exit for a loss around -$900
    • (# contracts x contract size) x (exit price – entry)
    • (50 x 1) x ($500 – $445)
  • A 20% margin requirement with 5:1 leverage requires $4,630
    • (# contracts x contract size x price) / leverage
    • (50 x 1 x $463) / 5

Short example: Ether (ETHUSD)
A trader sells 30 contracts of ETHUSD (30 Ethereum) at USD $350

  • If prices fall to $300 the trader could exit for a profit around $1,500
    • (# contracts x contract size) x (entry price – exit price)
    • (30 x 1) x ($350 – $300)
  • If the price rises to $375 the trader could exit for a loss around -$750
    • (# contracts x contract size) x (entry price – exit price)
    • (30 x 1) x ($350 – $375)
  • A 20% margin requirement with 5:1 leverage requires $2,100 of capital to open the trade
    • (# contracts x contract size x price) / leverage
    • (30 x 1 x $350) / 5

 

Costs Associated with Trading Ethereum CFDs

Spread:
The spread is the difference between the bid and the ask price and is a transactional cost which is incurred once a trade is opened.

The spread is a variable rate, and its width is dictated by the amount of liquidity available. Typically speaking we would expect a thinner spread during higher periods of trading activity and a wider spread during periods of lower volume. With higher trading activity using taking place throughout the US and European sessions the spread is usually thinner than Asian hours. However, the spread can also widen around news events.

You can see the spread within MT4’s deal ticket and market watch window.

In this example, the spread is $2.15 USD ($4.56 – $2.41) if one contract is purchased

Ether (ETHUSD)
Bid / Ask:
462.41 / 464.56

In the next example, the spread is $2.86

Ether (ETHUSD)
Bid / Ask:
351.24 / 354.10

 

Swap:
A daily swap charge (or rebate) will be applied to all open positions held overnight. Swaps are derived from lending rates between the underlying crypto exchange and the daily USD swap for ether. Swap rates are variable and can be positive or negative depending on if the trader is long or short.

To view swap rates in MT4, right click over a market in the “Market Watch” window and select “Specification” from the dropdown menu.

Swaps are calculated 365 a year, so Friday’s are a “3-swap day” (triple charge or credit) to account for the weekend when the market is closed.

Advantages of Trading Ether CFDs

  • Trade long and short
  • Trade ether on margin
  • Trade ether with speculative tools
  • Trade ether alongside legacy markets, all from the same platform
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Trade Long and Short
The ability to trade long and short allows the trader to take a directional view in bullish and bearish markets. This is not usually an option on crypto exchanges as it is there to facilitate financial transactions.

Trade Ether on Margin
Lower margin requirements allow a trader to speculate on the underlying market at a fraction of the cost.

Trade Ether with Speculative Tools
By trading Ether CFDs you gain access to speculative tools not available on a crypto exchange, such as stop loss, take profit leverage and the ability to trade short.

Trade Ether Alongside Legacy Markets, All From the Same Platform
Now traders of forex, commodities and indices can trade Ether within MT4 without having to switch providers or open a digital wallet.

Why Trade Ether with FXTRADING.com?

  • Trade Ether CFDs with a regulated broker
  • Lightening quick trade execution
  • Scalpers, EA and HFT traders welcome
  • No dealing desk
  • Multiple deposit options
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Trade Ether CFDs with a Regulated Broker
FXTRADING.com are proudly regulated by ASIC (Australian Securities and Investments Commission).

Lightening Quick Trade Execution
We have invested heavily into our trading infrastructure to provide a fast execution service for our traders.

Scalpers, EA and HFT Traders Welcome
Not all brokers cater for high frequency traders (HFT) or scalpers. FXTRADING.com welcome such traders and encourage them to take advantage of our lightening quick trade execution.

No Dealing Desk
We offer all traders STP (Straight Through Processing) which means there is no dealing desk to tamper with your trades. We are simply here to facilitate your trading, not hinder it.

Multiple Deposit Options
We accept multiple currencies via several popular payment methods such as Skrill, Neteller, POli, international bank wire and local bank transfer.

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