Find answers to our most common sector-related questions. If you can't find the information you need here, try our contract details page.
What are sectors?
A sector is a measurement of the combined value of the underlying stocks in a particular industry. Put simply, a sector is an industry or market that shares common characteristics.
We offer 35 different Australian and UK sectors, which represent the stocks that make up the ASX 200 and FTSE® 350 and include the popular Materials and Financials sectors.
For a full list of these sectors please see our contract details.
What are the benefits of trading sector CFDs?
Sector CFDs offer greater exposure than trading on shares, but allow you to focus on industry-specific trends and take a more targeted position than you could achieve by CFD trading on an index.
CFD trading on a sector lets you take a view on a group of shares that will tend to rise or fall together, minimising the risk of trading on individual shares subject to company-specific news such as takeover bids or bankruptcies.
At the same time, if you think a piece of news or economic data will affect one sector particularly strongly, sector CFDs allow you to target a specific industry, keeping your profit separate from the weaker performance of the entire index.
Who trades CFDs on sectors?
Trading sector CFDs can simply be an effective way for traders to take a position on the movements of a particular industry. Whether you think the Retailers are set for a boost, or believe the Health industry will see downside pressure, you can take view with a sector CFD.
Alternatively, you might want to use sector CFDs as part of broader trading strategy. For example, you may believe the Australia 200 has been oversold and is set to advance by 250 points over the next fortnight, but feel that financial stocks will be a weak link during the rally.
In such a case, you could buy the Australia 200 stock index, while at the same time hedging against softness in the Financials industry by selling the entire sector.
How does CFD trading on sectors work?
Once you have thought about the sector you would like to trade on, you can check the prices we are currently offering on our trading platform. If you think the sector is going to rise, you ‘buy’ at the offer price. If you think the sector is going to fall, you ‘sell’ at the bid price.
Take the opposite direction to close your position; if you ‘sold’ to open, you would ‘buy’ to close, and vice versa.