CFDS
WHAT ARE CFD's?
Contracts for Difference (CFD’s) enable investors to speculate on a wide range of
markets, such as indices, equities and commodities, without actually requiring ownership
of the underlying instrument. In effect CFD’s enable investors to take advantage
of the prices moving up or down (buying or selling) on underlying financial instruments,
so that they could speculate on those markets. An increasing amount of traders are
turning to CFD’s as they are the most flexible method in trading the world’s leading
indices and stocks.
HOW DO THEY WORK
Contract for Difference (CFD) is an over -the-counter financial agreement that is
used to exchange the difference between the opening price and the closing price
of the contract at its close. All you are required to do is place a regular trade
with ForexTrada instead of buying/selling the actual instrument on which your contract
is based. The price of the CFD always corresponds to the price of the actual instrument
on which the contract is based. Traders that prefer not to be exposed to rate adjustments
at the time of maturity of the contract should close their position before the expiry
date. If you would like to know the exact expiry date of each CFD please go to our
futures expiry date page.
WHY TRADE CFD’S WITH FOREXTRADA
-
Short selling ability, which creates the opportunity of generating profit in a falling
equity market.
- Online CFD trading enables investments to be leveraged up to 25 times.
- Live streaming of CFD prices enables instant fills and better liquidity.
- CFD contract is one-to-one with the underlying asset.
- Low entry threshold, possible to purchase even 1 contract.
- Trade financial markets from around the world.
- Hedge other investments. Can be used to provide insurance against price falls in
an existing portfolio due to their hedging capability.