CFDs
WHAT ARE CFDs?
The CFD (contract for difference) is a financial derivative that allows investors to trade price changes in different financial assets. CFD contracts are basically agreements to pay the difference between the opening and closing prices of an underlying asset. In an investment, if your prediction on price direction is correct, you will make profits (the broker will pay you the difference); if your prediction on price direction is incorrect, you will incur losses (you will pay the broker the difference).
HOW DOES CFDs TRADING WORK?
CFD trading works using contracts that mirror the prices of financial markets, such as a share, index or currency pair. When you buy a CFD contract, you do not own the underlying asset; instead, you speculate on its price movements. Traders can trade CFDs on leverage by staking a small amount (margin) in order to control a much larger position in the market.