What is CFD?

Contract for Differences (CFD)

CFD is a tradable instrument that mirrors the movements of the asset underlying it. It allows for profits or losses to be realized when the moves in relation to the position taken. Trading CFDs has several properties:

  • Higher Leverage: CFDs provide much higher leverage than traditional trading. Lower margin requirements mean less capital outlay for the traders and greater potential returns. However, increased leverage can also magnify losses.
  • Global Market: We offer products in all the world’s major markets. This means traders can easily trade any market while that market is open.
  • No Shorting rules or Borrowing stocks: Certain markets have rules that prohibit shorting or require the trader to borrow the instrument before shorting or have different margin requirements. With CFD trading traders can be shorted and there is no borrowing or shorting cost.
  • Professional Execution: CFD trading include order types as traditional brokers such stops loss, take profit.
  • No Fees: To buy a trader pay the ask price and to sell bid price. No fees or commissions are charged for trading a CFD.
  • No Day Trading Requirements. Certain markets require minimum amounts of capital to day trade, or place limits on the amount of day. The CFD market is not bound by these restrictions.
  • Variety of Trading Assets .There are stock, index, , currency and commodity CFDs.

 

A few modifications were made in our CFD and FX in order to fit European regulatory requirements:

  • The contract is now based on asset currency, meaning when a position is opened it is based on the asset pair and not on the account currency.
  • Bid/Ask are built-in the prices.
  • Forex Balance differs from Binary balance.meaning the trader cannot take position on his entire balance if it includes bonuses as well (because the leverage) We added a pop-up that will be displayed every time a trader will try to take a position and his balance is not sufficient

 

Advantages to CFD trading include lower margin requirements, easy access to global markets, no shorting or day trading rules no fees. However, high leverage magnifies losses when they occur. CFDs provide an excellent alternative for traders and these have increased the popularity of the instruments over the last years.

ARTICLES

CFD - Gold Trading History

CFD – Gold Trading History

Gold trading has a long history. Discovered in ancient times, gold has been a sign of wealth and social position in many societies since it was first used as currency. Today gold is still an important material of trade and...
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CFD - Economic Indicators

CFD – Economic Indicators

Following is a list of economic indicators which are used in the USA. Obviously, there are many more in other leading economies (such as Germany, the UK, Japan, etc.). In general, not only the numerical value of an indicator is...
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What is leverage?

What is leverage?

Traders in Forex trade a contract of currency exchange rates. As the movement of currency rates can be very small, traders use leverage to increase their profit potential. Here is a step-by-step, practical example: You decide to open a contract...
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