CFDs were designed to improve market access for retail investors by offering non-standard contract sizes and terms across a broad range of markets. Contracts like the DAX, VIX and EURUSD are able to be traded from tick values of dollars and cents thanks to CFDs. This is a real win for retail traders.

Some people defend the B-book model under the guise of 'market making is critical for the offering of CFDs'. This is a play on words since market making and B-booking are two different things, and neither requires the other to exist.

What is market making and how is it distinct from B-booking? Is a B-book broker a market maker? Are B-books required for CFDs and market access? Do market makers and B-books warehouse risk the same way? All these questions and more are answered inside. Enjoy!

Disclaimer: Trading is high risk, losses may exceed deposit. Advice is general only. Refer to PDS at www.globalprime.com (AFSL 385620).