Meritz Securities Adds Currency, Commodity ETF and ETN Items Available for CFD Trading

[Asia Economy Reporter Jang Hyowon] Meritz Securities (CEO Choi Heemun) announced on the 19th that it has added 304 currency and commodity ETP (ETF/ETN) items available for trading in its Contract for Difference (CFD) service.

CFD is a product exclusively for professional investors, an over-the-counter derivative that settles the difference between the entry price and the liquidation price in cash without holding the actual stock.

The newly available currency and commodity ETP items for CFD trading include 198 domestic items, 96 US items, and 10 Japanese items. When investing in 2X leveraged ETP items via CFD, investors can achieve up to 5 times leverage investment effect.

While profits from CFD investments in existing items are subject to derivative capital gains tax, the newly added items are not subject to derivative capital gains tax when traded via CFD.

A Meritz Securities official stated, “By expanding the range of tradable CFD items, professional investors will be able to trade CFD items based on a wider variety of underlying assets,” adding, “We will continue to provide competitive services by understanding the needs of professional investors.”

Meritz Securities’ CFD service allows investment in stocks and ETPs listed in five countries: Korea, the US, China, Hong Kong, and Japan. Unlike most securities firms, it provides the service through its own hedging without going through foreign securities firms, thereby offering the full amount equivalent to dividends to investors.

Additionally, CFDs have the advantage of no comprehensive financial income taxation burden, reducing the actual tax burden when investing in high-dividend stocks or overseas ETFs listed domestically. For overseas CFDs, a derivative capital gains tax rate of 11%, which is lower than the 22% capital gains tax rate on general overseas stock investments, is applied, providing a more favorable environment for investors.