What are CFDs?

 

Contracts for difference offer all the benefits of trading commodities without having to physically own them. Contracts for difference (or CFDs as they are commonly referred to) mirror the performance of the underlying commodity or index. Contracts for difference are traded on margin, and the profit/loss is determined by the difference between the buy and the sell price. Because contracts for difference trade on margin, investors only need a small proportion of the total value of a position to trade.

Contracts for difference (CFDs) are instruments that offer exposure to the markets at a small percentage of the cost of owning the actual commodity. This allows the investor to buy or sell an instrument, at a fraction of what it would cost to actually buy the physical commodity. It offers great leverage opportunities.















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