What are Contracts For Difference
A contract for difference (CFD) is a trade carried out between an individual trader and a CFD provider. The price of the CFD is based on the market value of the underlying asset which can be an equity, a commodity or an index.
With CFDs trading, you trade on the movement of the asset’s value, without ever actually owning the underlying asset.
The value of a CFD rises or falls according to the difference in price at the time of opening the trade and the current price of the underlying asset.
Trading CFDs has a number of advantages over simply trading the underlying assets.
As CFDs are leveraged instruments, you can realize substantial profits from even small fluctuations in the prices of the underlying assets. Leverage also allows for larger trade sizes. It is, however, important to note that leverage can also act against you. Leverage is a tool, and as with any tool, it should be used wisely.
CFDs are available for a large range of instruments, allowing you to trade the instruments you are most comfortable with.
Trading in CFDs allows for profits in rising and falling markets. If you believe the price of the underlying asset will increase, go Long on the trade. If you believe the price of the underlying asset will fall, then open Short trades.
Our futures contract products have dates of when they mature. To allow our clients to trade without interruption, TradeFintech rolls over the old contract with the new contract before the old contract expires, without adding any additional charges or fees to your trading positions. The open price of the new contract is adjusted to reflect the previous open Profit/Loss. Any pending orders of the old contracts will be deleted (Buy/Sell Limit, Buy/Sell Stops, Take Profit and/or Stop Loss).