A CFD is a contract to exchange the difference between the opening value and the closing value of a trading instrument, multiplied by the number of CFDs in the contract. They are contracts for an individual share, stock index, bond, interest rate, commodity or foreign currency as the underlying market.
Why trade Contract for Differences?
As one of Europe’s fastest-growing trading instruments, contracts for differences are very simple and inexpensive to trade, and are more flexible than other trading methods. A main benefit of contracts for differences is that they suit most trading strategies and can complement existing investing methods. CFDs can be especially attractive to sophisticated investors who are looking to benefit from short-term volatility.
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Contracts for difference were originally created to imitate traditional share trading, but they differ from traditional stock trading because you don’t actually own the share; it is a derivative product. CFDs offer active traders significant benefits over other trading products. For example, with CFDs, you may have the ability to profit from both rising and falling markets.
CFDs are a leveraged product and therefore may not be suitable for all investors. CFDs carry a high degree of risk to your capital and it is possible to lose more than your initial investment or credit allocation as well as any variation margin that you may be required to deposit from time to time. You should only speculate with money that you can afford to lose. Please ensure that you fully understand the risks involved and seek independent advice if necessary and prior to entering into such transactions.
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We offer trading on major global exchanges and financial instruments. There are different benefits associated with each type of CFD, depending upon your trading style and level of desired risk tolerance. You can trade CFDs on individual equities, commodities, bonds and interest rates, stock indices and forex. For more detailed information on each type of CFD, please refer to our Market Information Sheets. Try our demonstration platform Individual Equities Individual equities are the most common type of CFDs, allowing you to trade individual shares on margin. Trading individual equity CFDs allows you to profit from rising or falling stock prices, while not actually owning the underlying share. We offer thousands of share CFDs from exchanges in Europe, the US, Australia and more. Trading CFDs allows you to avoid many of the costs and disadvantages that are associated with purchasing the actual shares. Stock Indices In addition to trading individual equities, you can also trade the major global stock indices on margin. Index CFDs are based on the performance of an entire stock index. This allows you to take a position on the direction of the entire market, not just an individual company’s stock. You can gain exposure to many different shares with one transaction. We offer stock index CFDs from exchanges in Europe, the US, Australia and Asia. Commodity Futures We have a number of commodities available as futures-based CFDs. You may take long or short CFD positions on these commodities, and can seek to capture profit during rising or falling markets. Bonds and Interest Rates You can speculate on the prices of various futures-based government bonds and interest rates. Forex Trade the exchange rate differentials on major currency pairs as CFDs. We offer CFDs on major forex currency pairs.
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A major benefit of trading CFDs with our partner is the wide range of order types that can be used. In order to assist you in limiting your exposure to loss, we offer a comprehensive and flexible range of market orders that can be used to either limit your losses or realize profits at specified levels. CFDs, as with many other forms of financial speculation, can carry a relatively high degree of risk. A variety of order types can be placed to get in and out of the market with ease, and can also limit your exposure to risk. BPForex is a Introducing Broker to WHSelfinvest.
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