The debate on retail trading in India had long been dominated by equities only. The domestic stock markets were volatile and familiar enough to ensure that most players were not seeking alternatives. What has changed over the past few years is a growing understanding among Indian retail traders that a single asset class is not a full picture of global market opportunity and that instruments that provide exposure to multiple markets with a single account are a practical lure that is hard to resist.
Many Indian traders who venture into multi-asset instruments have done so through commodities. Gold is culturally and financially important in the entire country, and traders who have been brought up watching their family members purchase physical gold at festivals will feel as though they are expressing a market opinion on the metal with a leveraged position. Silver, crude oil and natural gas have come after as people became familiar with the mechanics of CFD trading. A Surat trader who had first opened an account to hedge on gold prices will soon after a few months be staring at Brent crude charts whenever OPEC makes announcements, as attentively as they once watched Nifty 50 movements.
A different type of interest has been drawn to equity index CFDs. Instead of making stock selections, traders have the ability to speculate on how a given market is going to move, whether the S&P 500, heading into a Federal Reserve announcement, or the DAX, reacting to European inflation news. This is of interest especially to traders with close attention to macroeconomic news but have no time and resources to analyze individual companies. It is cleaner, the story is less convoluted and the liquidity on big indexes tends to be deep enough to allow entries and exits without excessive slippage.
Currency pairs have never been excluded in the multi-asset discussion, though their purpose has changed. Whereas in the past forex was the preferred entry point for internationally minded Indian traders, it has now been placed just as one of the instruments in a wider portfolio strategy. There are also traders who switch between classes of assets based on the location of volatility in a particular week, switching between currencies, commodities and indices. Such tactical flexibility can only be achieved in a multi-asset structure and it is a more advanced strategy than focusing on a single market.
Crypto CFDs hold a curious place in this environment. Some traders in India have been using CFD trading to gain price exposure without the hassle of wallet management and domestic exchange limitations in response to regulatory uncertainty regarding direct cryptocurrency ownership. These volumes are worth noting particularly among younger traders but more serious players are more cautious about the crypto CFDs due to the leverage risks on an already volatile underlying.
What multi-asset access has broadly achieved is a shift in the way the Indian traders think of diversification. Diversification is no longer an abstract concept drawn from textbook recommendations about spreading equity holdings. It has already come into play, manifested itself in practical positions in the markets that react to various drivers of the economy and move in varying times. A trader who is trading a precious metals position and a currency pair at the same time is playing global finance in a manner that was a few years ago a preserve of institutional desks.