What is CFD Trading
CFDs trading is an agreement between two parties to settle the difference between the opening and closing prices of the contract multiplied by the number of units of the underlying asset specified in the CFD.
CFDs allow customers to participate in the price movement of an underlying product without actually owning the asset, which can be a share, an index, a commodity or a currency.
Benefits of trading CFDs
- Potential to profit from both a rising and falling market
- Ability to trade on margin to gain greater market exposure and capital efficiency
- Access a wider range of markets and exposures across multiple time frames and regions
Higher leverage, more trading power
- Low margin requirements and trading costs make CFDs an effective diversification tool
- Investors have the potential to use CFDs to improve capital efficiency with the potential for higher return on equity
Associated risk and management tools
- Associated leverage amplifies both the profit and loss potential of CFD trading
- Learn how PhillipCapital CFDTrader can help a client maximise returns and minimize losses through the use of Stop-Limit orders