Contract For Differences is a new way for investors to trade the markets. This form of trading is reaching new heights in terms of participation as it helps in speculating the markets in both long and short directions. When traders use CFDs, they do not own the financial asset and only trade on the price difference. They enter a contract with their broker to sell the asset at a later time and date.
Before diving into what CFDs are, let us look at their potential advantages for traders. They can also be included as the characteristics of CFD trading.
It is pretty easy to start trading with a CFD broker. Within a few steps, traders can get into the markets:
There are multiple account types presented through CFD brokers. The trading costs can vary accordingly. To understand better, let us go through a few available options:
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