What are CFDs?
CFD’s (Contract for Difference) are financial derivative products that replicate the underlying price movements of securities and investment products traded daily in the global financial markets.
CFD is a cost effective derivative that mirrors the underlying markets price movements. The benefit is that, as a client, you do not have the liability of the contract delivery on expiry. You can still enter into a buy or sell commitment. Your only concern is the price movement and the size of your trade.
As mentioned above, CFDs are cost effective with low margins, zero commission and competitive spreads. In addition to that you are trading these products with state of the art technology including mobile and desktop platforms. You can execute your trading strategies with efficiency anywhere.
CFDs provides investors with easy access to the global financial markets, whether hedging existing exposures or looking to speculate.
An example of trading with CFDs:
You sell 100 CFDs @ 86.90 (predicting a bearish market, meaning you expect prices to fall)
You buy 100 CFDs @ 86.84 Therefore your P/L would be…
P/L = (8690-8684) x 100 = 6 x 100 = $600