CFDs are one of the most widely used instruments by active traders. Flexible, accessible, and suited to a wide range of strategies — here’s what you need to understand before you start.
A CFD is a contract between a trader and a broker. Both parties agree to exchange the difference in an asset’s value between when the contract is opened and when it is closed. If the value rises and you were a buyer, you pocket the difference. If it falls, you pay it.
In plain terms: you speculate on price movement, not on ownership of the asset. You never hold Apple shares, barrels of oil or ounces of gold — you simply trade their price movement.
From a single platform, you can access a wide range of markets. This breadth allows you to diversify your strategies and adapt to market conditions without switching platforms.
CFDs are leveraged products. You don’t need to put up the full value of your position. A margin — a percentage of the total amount — is all that’s needed to open a trade.
Knowing these costs before opening a position is essential for accurately assessing the profitability of a trade.
Go short just as easily as going long. If you expect an asset’s price to fall, you sell — and you profit from the decline.
One platform is all you need to trade US indices, Asian commodities, or European stocks.
Fine-tune the size of your positions to match your capital and appetite for risk.