What is the difference between Currency ETCs and CFDs, certificates and warrants?
The collateralised structure of Currency ETCs has been covered above. Once listed on the stock exchange, the Currency ETCs are supported by multiple, independent market makers who compete for business. Certificates or warrants are notes created, priced and traded by a single issuing bank – there are no creations/redemptions on demand and they are generally less liquid. Similar considerations apply to CFDs, which will be offered and priced by a single house. CFDs, certificates and warrants will generally involve uncollateralised counterparty exposure and may, in the case of CFDs, involve the scope for contingent liabilities.
