In this paragraph, I’m going to explain what a Contract For Differences (CFD) is. Firstly, CFD is a contract between an investor and an investment bank, or spread betting firm. Secondly, this contract is about an underlying financial instrument such as stocks, bonds, shares, commodities, and others. Thirdly, at the end of the contract, the parties exchange the difference between the opening and closing prices. These prices are of a specified financial instrument. In conclusion, CFDs are a type of financial derivative and a good way to invest.
Contracts for differences are not allowed in the United States.
KEY POINTS IN THIS WAY TO INVEST
- CFDs pay the differences in the settlement price between the open and closing trades.
- CFDs allow investors to trade the direction of securities over the very short-term.
- Investors have earnings from both bull and bear markets.
- High leverage, that means a smart way to invest.
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76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
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