Paddy Power Trader is preparing to enter the Contracts For Difference (CFD) market in the second quarter of this year.

Directors of the business have told What Investment.co.uk that demand for the service has been growing among its existing customer base and it has already discussed development plans with potential software partners.

Davin McAnaney, commercial manager at Paddy Power Trader, said that competition in the CFD market is increasing as more private investors become more familiar with the product.

He explained, ‘We are aware of Tradefair’s foray into CFDs (click here) – we know them well and we talk. From our perspective, we are a new player in the space. Are we going to bring a world-beating platform? No.

‘But we will gain a point of difference with educational tools and real-time news as a differentiator. We find that a lot of customers come to us because they find the [existing] website very accessible and easy to use. Some other sites can be quite scary for the firs timer.’

The company says that it will not be doing any of the development for the platform in-house. Last month, Tradefair began recruitment for its new derivatives platform, branded as the London Multi Asset Exchange (LMAX)

Further details on this story are available in the March edition of What Investment, available in newsagents from 27 February 2010.  A comprehensive survey on share dealing, spreadbetting and CFDs also appears in the issue.