CFD Trading Explained in 3 Points

  1. 1
    CFD Trading gives you the opportunity to profit from the rise or fall of a market without having to own the asset
  2. 2
    CFD Trading is a leveraged product, you are only required to deposit a percentage of the total value of your position
  3. 3
    You can go long or short of hundreds of markets when trading CFDs

What is a CFD?

A CFD (Contract for Difference) is a financial derivative that allows traders to speculate on the price movements of an underlying financial security. The Contract for Difference is an arrangement for one party to pay the difference in value from when the trade was opened to when it was closed. CFDs can be traded on 100s of markets, including commodities, currencies, indices and shares.

History of CFDs

CFDs are a financial product devised in London in the 1990s, they were first used by hedge funds looking to short sell and place larger trades than could be executed in the underlying market. CFDs offered the perfect opportunity to trade with leverage and go long or short on 100s of financial markets whilst avoiding UK Stamp Duty.

The tech boom of the late 1990s provided a wealth of new markets ideally suited to CFDs, and CFD trading has now spread to other major financial centres. Approximately a third of the total volume traded on the London Stock Exchange is CFD related.

Core Spreads

Core Spreads is financial trading as it should be. No noise – just tight spreads on thousands of markets.

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