CFD trading introduction (CFD trading with RTFX coming soon...)

A contract for difference (CFD) is simply an agreement between two parties, seller and buyer, which stipulates that the seller will pay the buyer the difference between the current price of an asset and its value at a determined value date. If the difference is negative, then the buyer pays instead to the seller .

Used by experienced traders for nearly 20 years, it has only been in the last few years that it has become popular. This type of contract is classed as a derivative product and is applicable to all types of assets. CFDs allow investors to speculate on share price movements, as well as indexes and commodities without the need for ownership of the underlying products.

In other terms, these are derivative products that permit investors to ideally intervene on short movements without having to own assets on the other side. Online traders find a greater flexibility to maximize their gain and to cover the risks turning more and more with the CFD. CFDs are not permitted in the USA , due to restrictions by the U.S Securities and Exchange Commission on OTC financial instruments.

Returns on CFD trades are generally higher due to low commissions compared to regular contracts. The CFD investor will never physically own the shares, indexes or commodities; this means that a trader can acquire these instruments without having the total amount required for the transaction. The acquired instruments will never be given to the investor.

Open a trading account with RTFX