CFD stands for Contract for Difference (from English Acronym for Contract for Difference).
CFDs are simple inexpensive contracts that allow you to trade on a wide range of financial instruments by operating on the difference in value over a certain underlying asset matured between the time of the start and the end of a contract.
They also allow a trader with a long position to receive a split dividend from the stock title to which the CFD is tied.
CFDs enable bidirectional operation on the market, allowing traders to operate LONG and SHORT positions, making profits even in the bearish phases of the market.
Trading CFDs with leverage allows traders to invest with more capital than they have in their account thus enabling them to increase positive/negative results.
Trading with CFDs means working on contract price differences: they profit or generate losses based on the difference between the purchase price and the selling price of the underlying, multiplied by the number of CFDs.
Margin/leverage notice: due to regulatory requirements the default CFD leverage is set to 1:50. Traders will have the ability to adjust leverage according to their level of experience during the registration process.
As is with other derivatives and investments, CFDs are considered risky and complexed investment products. It is recommended to only invest if you are familiar with trading investing in margin traded investment products and also only invest capital you are willing to lose.
For more information about the risks involved with CFD investing, please see our CFD Key Information Documents.
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