CFDs (Contracts for Difference) are now a highly popular investment option for investors. They are available for forex pairs, such as the EURUSD, GBPUSD and many others, plus commodities such as gold and silver, stocks, such as Apple and Google, indices such as the DAX and the FTSE, and many more. There are thousands of financial assets available for trading as CFDs. CFDs allow retail and institutional investors to speculate on the price movements of the underlying assets without having to purchase or own them. As derivative products, they can be traded on leverage, which means only a small amount of capital is needed to control a much larger position in the market.
CFDs are not traded on exchanges but are rather over the counter (OTC) products offered via a network of liquidity providers and market makers who ensure they are priced accordingly.
CFDs enable efficient medium-term speculation. Consider this, an investor wishing to speculate on the price of oil in the traditional commodity futures market will have to take into account the cost-effectiveness and tax issues, and apart from huge capital requirements, the trader will also hope for
a big price change in order to make any reasonable returns. As for CFDs, there will be less such considerations and you can trade with a much lower capital outlay, where even a slight price change can yield considerable returns. The ease of access to global financial markets and literally eased day trading restrictions, make CFD trading a great option for modern retail investors and traders.
Learn more about CFD trading. Visit the FTGMARKETS Trading Academy