A contract for difference (CFD) is a financial contract between two parties in which the seller agrees to pay the buyer the difference between an asset's current value and its value at a time stipulated in the contract.

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How does a CFD work behind the scenes?

I'm curious as to how the Contracts For Difference (CFDs) work. I understand how they work for the consumer side - you enter into an agreement to pay/be paid the difference between the stock price at ...
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48 views

What is the difference between spot forex trading and cfd forex trading?

Some brokers offer to clients the facility to trade the foreign exchange market via the spot market or via CFDs. The thing I don't understand is that some currency pairs are offered via both methods. ...
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Is it possible to trade CFD without leverage?

I'm new to trading. Based on what I read, trading CFD involves high risk because of leverage. Is it possible to trade CFD stocks without leverage (in Etoro for example)? If this is possible, then I ...
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164 views

Overnight charges for brokers holding stocks?

I'm trying to learn about stock markets. I eventually want to invest a small amount over a long period. Yet, I notice on a lot of broker sites that they tend to charge an overnight fee for any stocks ...
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118 views

How trading in currency pair works, underlying techniques and mechanisms

I am somewhat experienced in Forex trading, but I have a question which has bothered me for quite some time. If we for instance go back in time four months, to before the beginning of value loss the ...
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Is it a bet on price fluctuations and against the house?

When one trades Forex, CFDs, metals, or stock indexes with online brokerage firms, does it mean we bet on the price fluctuations without actually owning the underlying assets and is it a bet against ...
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864 views

Is CFD a viable option for long-term trading?

Something really does seem seedy that if I invest $2500, that I'll make above 50k if the stock doubles. Is it really that easy? Looking at the opposite side, yes my investment can vanish from just a ...
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141 views

Why people still look for “naked” short-sellng stocks instead of short selling CFDs

I have been doing some research about equity trading and the stock market in general, and I have a doubt. I see that a lot of people is looking for short-selling stocks, but that is not so easy ...
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Can liquidity provided by CFD be almost as good as the real market action on the actual exchange?

CFD providers mirror the market action on the actual exchange. But how good is the mirroring? Do they try to match both the bid-ask prices and the bid-ask sizes exactly? Is it possible that the ...
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168 views

Do CFD providers withhold liquidity in a market panic?

My understanding of CFD providers in UK is that they try to imitate the real market action by being market makers. However, is it a risk that they may withhold liquidity in a market panic crash to ...
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Buying a small amount (e.g. $50) of stock via eToro “Social Trading Network” using a “CFD”?

On LinkedIn I saw an ad claiming I could buy some AAPL stock for as little as $50. I clicked and came to a site called eToro that calls themselves a "Social Trading Network". It appears the buying of ...