Trading Contracts for Difference (CFDs) explained. CFD Guide.

12 August 2013 - Which Way To Pay

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Things you should know before you start CFD (Contracts for Difference) trading

CFD, or Contracts for Difference, is a popular way to invest your money and a popular way to make money.

What is CFD trading?

Contracts for Difference (CFDs) provide a thrilling way of profiting from movements in the stock market, shares and indices without actually purchasing shares.

Why are CFDs popular?

The great thing about CFDs trading is based on two important characteristics. The first being you can choose to decide whether the market will rise, or alternatively fall. If you are correct and the market moves in your favour you will make a profit. If however, you are wrong and the market moves against you, you will make the same loss. The second popular thing about CFDs is it is based on margin trading. This means you only have to deposit a percentage of the value of the contract, although you must have the funds in your account to cover any losses.

What are the risks associated with CFDs?

CFD trading carries a high level of risk to your capital and you can lose more than your initial deposit. These trading products may not be suitable for all investors so seek independent advice if you are in any doubt. CFD trading could result in large losses so you should only ever consider trading if you have the funds in place should the markets not move in your favour.



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