CFD's Contracts For Difference

Submitted by Marco on 2 January, 2006 - 11:56

CFD stands for Contracts For Difference - a high leverage share derivative financial product

CFD's are leveraged products that trade on any number of financial equities.

A CFD mirrors the performance of a share or index and offers the benefits of trading shares without having to physically own them. It is traded on margin, and just like physical shares your profit or loss is determined by the difference between your buy price and your sell price. However, CFDs offer many benefits over and above physical share trading. This section seeks to explain these.

Originally used by large institutions to cost effectively cover their equity exposures, CFDs are now a commonplace trading tool used by retail investors around the world.

CFDs allow you can trade Australian and global share, index, sector, treasury and commodity CFDs. If you have a view on a market sector (mining, energy or banking), Oil, Wheat, US T Bonds or an entire index (US30, UK100, AUSSIE200) CFDs offer you a cost effective way to trade these instruments from a single trading account

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