CFD Trading Basics

CFD stands for a contract for difference. A CFD is a contract between an investor and a CFD broker to exchange the cash difference between the opening and the closing price of a trade. It is a derivative based on an underlying cash instrument and the investor does not actually take ownership of the underlying instrument. CFDs move in direct correlation to the price of the underlying security, usually with the bid and offer that the CFD provider gives being the same as the market dealing spread. It is possible to trade CFDs on securities such as equities, indices, ETFs, commodities, and currencies.
CFDs are an excellent investment vehicle to take advantage of stock market volatility. Especially during uncertain economic periods, the way the markets are moving makes it very difficult to make money by just sitting on positions. With CFDs is it possible to sell shares that you do not own. with CFD trading, you can profit no matter which way the market moves
CFDs are leveraged trading instruments; Instead of paying the full value of the underlying asset, you pay a fraction which called “initial margin” to open the position and are required to maintain some minimum margin level for open positions at all times.
CFD Trading provides a simple trading instrument to more than 9,000 assets including Indices, Single Stocks, Commodities and more.

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