CFD

Trading

What is a contract for difference?

Contract for Difference ‘CFD’ which is a contract between an investor and an investment bank for a short-term period. At the end of the contract, the parties exchange the difference between the opening and closing prices. Trading CFD’s means that you can either make a profit or loss, depending on which direction your chosen asset moves in. CFD trading helps you to speculate on the rising or falling prices of fast-moving global financial markets such as shares, indices, commodities, currencies.

CFD trading
CFD trading

How do CFDs work?

CFD is ‘contract for difference’, which is a contract between an investor and an investment bank for a short-term period. At the end of the contract, the parties exchange the difference between the opening and closing prices. Trading CFD’s means that you can either make a profit or loss, depending on which direction your chosen asset moves in. CFD trading helps you to speculate on the rising or falling prices of fast-moving global financial markets such as shares, indices, commodities, currencies.

What are the costs of CFD trading?

Spread: While trading CFD’s, you must pay the spread, which is the difference between the buy and sell price. You enter a buy trade using the buy price quoted and exit using the sell price. The narrower the spread, the less the price needs to move in your fav out before you start to make a profit, or if the price moves against you, a loss. We offer competitive spreads.

Holding costs: At the end of each trading day, any positions open in your account may be subject to a charge called a ‘CFD holding cost​’. The holding cost can be positive or negative depending on the direction of your position and the applicable holding rate.

Market data fees: To trade our price data for CFD’s, you must activate the relevant market data, for which a fee will be charged.

Advantages of CFDs

  1. CFD’s provide higher leverage than traditional trading, standard leverage in the CFD market is subject to regulation. Lower margin requirements mean less capital expenditure for the trader and greater potential returns, increased leverage can also maximize a trader’s loss.
  2. Many CFD brokers offer products in all the world’s major markets, allowing round-the-clock access. Investors can trade CFD’s on a wide range of worldwide markets at our platform.
  3. To buy, a trader must pay the ask price, and to sell or short, the trader must pay the bid price. This spread may be small or large depending on the volatility of the underlying asset fixed spreads are often available
  4. Certain markets require minimum amounts of capital to day-trade that can be made within certain accounts. The CFD market is not bound by these restrictions, and all account holders can day-trade if they wish at our platform.
  5. We currently offer index, currency, and commodity This helps speculators interested to trade CFD’s as an alternative to exchanges
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