Essentially, CFDs represent an agreement between the investor and the trading provider or broker to exchange the difference in the price of a financial product between the time it was opened and the time it was closed. With CFDs, there are no deliveries and no underlying assets owned by any party.
Are online CFD providers the future of trading?
Online CFD providers opened the door to a host of new possibilities for traders, including adding derivatives to their portfolio. Today the London School of Economics estimates that CFD trading accounts for more than a third of all stock market trades in the UK.
Are CFDs legal in the US?
The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) prohibit residents and citizens of the U.S. from opening CFD accounts on domestic or foreign platforms. Is Trading CFDs Safe?
What is a CFD (contract for difference)?
A CFD (contract for difference) is an agreement between a buyer and a seller that the buyer must pay the difference between the current value of an asset and its value at contract time. A CFD trader will never truly own the underlying asset but profit from its price movement.
