One of the easiest ways to trade oil is with CFDs (contracts for difference). A CFD is a type of derivative which allows you profit on the price change in oil. Instead of owning oil, you simply profit off of the movement in oil’s price. Oil prices change frequently throughout the day, giving you many [...]
CFD Articles
Find comprehensive CFD trading articles here at CFDinvestor. These CFD articles will be helpful whether you’re actively trading or just looking for general eduction about CFDs. It pays to get a good understanding of CFDs: what they are, how they work, brokers, fees, and other factors. Familiarise yourself with these free CFD articles and become more informed about CFDs and CFD trading.
A contract for difference (CFD) is a financial derivative which enables you to profit from the movement in price of an asset over a period of time. You can buy and sell CFDs for all sorts of assets including commodities, currencies, bonds, stocks, and more. CFDs are traded in an over-the-counter (OTC) market. What this [...]
Since 1993, traders have had the opportunity to trade Exchange Traded Funds (ETFs). Since then, ETFs have only increased in popularity among investors. ETFs are similar to tracker funds in that an ETF is a security which tracks an index, commodity, or set of assets as though it were an index fund, but trades more [...]
Interested in trading silver with CFDs? CFD trading with silver is powerful and efficient, because it allows you to trade on leverage. This means that the margin you need to provide can be as little as 0.5%, which provides you with a leverage of 200:1. The futures market only lets you trade with a leverage [...]
CFD demo accounts can be a very useful learning tool for investors just starting out with CFD trading. Demo accounts are offered by most CFD brokers as a way to learn CFD trading with practise trades and estimate profits, without actually depositing money. A CFD demo account is comparable to a fully-functional trading account, only [...]
The right CFD broker can make all the difference when it comes to successful trading, and there are several aspects to look at before choosing your broker. How to choose a CFD broker: FSA authorisation In the UK, this is possibly the most significant deciding factor. The Financial Services Authority (FSA) is the regulatory body [...]
CFDs work much like any other financial instrument, and these numerical examples will help elaborate exactly how they translate to profits. What are CFDs?: Long Trades with Share CFDs When there is a predicted increase in asset price, traders can leverage the market potential with a long trade. Assume BP plc stocks trade at 140 [...]
There are a range of ways contracts for difference can be traded. In general, CFDs can be exchange traded, unlisted or listed. Each type brings its own set of benefits, and based on your specific trading strategy you could choose to trade any of these different categories of CFDs. Types of CFDs: Unlisted CFDs This [...]
A CFD trading account provides you with all the tools to place your orders, and every CFD trader needs to open one with a reliable CFD broker. Choosing the right broker to open an account with can however get tricky, especially because your trading account acts like an intermediary that helps you take charge over [...]
Most people’s perception of personal investing focuses on the stock market, and share trading is seen as the ideal approach to getting good return on investment. Veteran investors, however, understand that the market is far more intricate than meets the eye, and a wide range of investing instruments abound including contracts for difference or CFDs. [...]
CFDs (contracts for difference) can be used to trade gold and silver, just like trading shares or other assets. CFDs are a derivative, which means they derive their price from the underlying asset, but do not actually give you ownership of gold or silver. What this means for you is that when you take a [...]
There is a fair argument that when it comes to risk versus reward, options outperform CFDs. For this to be true though, certain conditions need to be met with respect to options. When these conditions are not met then other tools such as CFDs may be a better choice, but not vice versa. It’s highly [...]
CFD trading can be very risky due to CFD leverage, but a CFD stop loss is an easy way to limit the risk of heavy losses. You should always use a stop loss when trading – here are a few key points to be aware of. What is a CFD Stop Loss? When you place [...]
SHORT SELLING usually refers to how traders can make a profit when asset prices are falling. Once you are familiar with the technique of short selling, you have a chance to take advantage of falling prices. Therefore in a bear market (when prices are falling), short selling gives you a chance to still make a [...]
The history of CFDs (contracts for difference) starts in the United Kingdom with the passing of the Financial Services Act in the 1980s. This legislation made it much easier for private individuals to buy shares, and spurred the general public’s activity in financial markets. There was a privatization of several public industries, and anyone could [...]
FOREX CFDs are one of the most interesting types of CFDs (contracts for difference) available today. As with other types of CFD trading, Forex CFDs allow you to take a contractual position on an asset, in this case the value of a currency, without owning the asset. Investors can take long or short selling positions [...]
If you want to trade energy, gold, precious metals, grains, oil, or soft commodities markets, commodity CFDs are a simple way to trade them. Just how many of these markets are available depends on the individual CFD provider. Commodity CFDs are a relatively easy approach to commodity trading compared to Futures exchanges. It is important [...]
Sector CFDs allow you to profit from of the performance of an entire industry sector, without trying to understand the complex interactions of specific companies within that industry. Stocks are commonly organised by industry, using the GICS (Global Industry Classification System). The majority of experts and those in the media refer to these classifications as [...]
Imagine that you are a trader looking for an investment mirroring a stock index such as the FTSE 100. Before CFDs and other derivatives were introduced, the only way to do that would be to buy a mix of individual stocks that exactly matched the index’s stocks and their proportions. Back then, the sole option [...]
Share CFDs are one of the main types of CFDs, also known as equity CFDs. The CFDs typically offered are derivatives of shares registered on the US S&P 500, NASDAQ, and Dow Jones 30, in addition to Germany’s DAX, London’s FTSE, France’s CAC, along with other markets from Europe. Brokers from the Asia Pacific region [...]
Normally when you buy a share in a company, this means you hold an actual piece of the equity of that corporation. In other words, it is part ownership of the business. The implications are that you get to participate in the gains of the business. These numbers are arrived at on an individual share [...]
This page gives you a comparison of CFDs vs. spread betting to help you understand the advantages of each. Both instruments have been gaining popularity , and they can be used together once the benefits of each are understood. With knowledge of the differences of CFDs vs. spread betting, you can apply the appropriate instrument [...]
Corporate actions can be defined as any action from a company that effects its shareholders. It can be anything from mergers, to buy-backs, to stock splits. Essentially, the holder of a CFD has the same duties as a regular shareholder, but without the same rights to vote. CFD contracts are changed to mirror the activity [...]
CFD fees are paid for by a variety of different methods. These include CFD commission, where the CFD broker takes a fee per transaction. Some providers also charge platform fees, which are monthly costs for using their trading platform. Other CFD fees are spread costs and margin financing. CFD Commission CFD brokers usually charge a [...]
Like any financial product using leverage, a trader must make margin payments on a CFD. The concept of margin is important to understand, to get insight into the finer points of CFDs. A good starting point is to make the distinction between the two main kinds of margin payments: initial margin and variation margin. As [...]
Liquidity is the extent to which an asset can be traded in the market, and not have its price affected. It generally means that the asset is traded at a high volume. In relation to CFD trading, Direct Market Access CFD brokers protect themselves from open contracts by buying shares of the underlying assets on [...]
Synthetic CFD pricing is a process where the CFD provider acts as market maker, and uses the underlying asset’s spread to give investors a correlating price. As an example, imagine that the real market “ask” price of an imaginary share in ABC limited is $10,000. Upon seeing this, the provider decides to offer you the [...]
With CFD Prices and Trading Costs models, most investors favour the DMA (Direct Market Access) procedure. Demand for Direct Market Access CFDs has caused an increasing number of brokers to offer them. What caused this move towards DMA and away from synthetic pricing is the expanding amount of CFD investors, creating fierce competition amongst CFD [...]
If a CFD provider is referred to as the market maker, this means that when you trade, you buy and sell CFDs directly from them. The CFD market maker creates the buying prices and selling prices for entering and exiting positions, and hedges their CFD exposure on the market. What this means for you as [...]
The factors that make for a good CFD broker depend mainly on what you’re looking for. Are you a new or experienced investor? Do you plan to make a high or low volume of trades? What types of assets does your CFD strategy include? The answers to these questions and more will determine what to [...]
