CFDs, or contracts for difference, are a type of trading instrument. You can trade a wide array of underlying assets, including shares and currencies.
So how do contracts for difference work?
Let's take a closer look…
You trade on margin with CFDs
Like with other financial derivatives, you trade on margin with CFDs. This means you put down a small portion of your overall exposure ... ››› more
One of the reasons that traders choose contracts for difference (CFDs) is the gearing aspect they offer.
Gearing amplifies the movement of the underlying share price. This can work for you by multiplying your potential profits, but against you too as it also multiplies your losses.
Gearing comes from trading on margin.
Read on to find out how this work…
The impact of trading CFDs ... ››› more
The gearing aspect of trading contracts for difference (CFDs) is one of the reasons traders find them attractive.
But gearing can work against you. And that's why you must understand the risks you take on when trading CFDs and take steps to control this risk.
So what is the effect of gearing on you as a CFD trader? And how can you control the risks of trading CFDs?
Read on to find out… ... ››› more
Contracts for difference (CFD) appeal to traders thanks to the money multiplying effect of gearing.
But this gearing also works against you. If you don't run tight stop losses, you're at risk of hefty losses.
Let's take a closer look at how you can rack up significant losses if a trade doesn't work out as you hoped…
The gearing aspect of CFDs comes from trading on margin
When you ... ››› more
Contracts for difference (CFDs) are geared products. This means there's a money multiplier effect at work.
Gearing is both an advantage and a disadvantage. Whilst it multiplies your gains, it also multiplies your losses.
So what is gearing when trading CFDs?
Read on to find out more…
How gearing works when you trade CFDs
When you trade CFDs, gearing comes from only putting down... ››› more
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