Level: Beginner / Length: 18 minutes
In this module we’ll explore Contracts for Difference, better known as CFDs, and learn what they are and how they work. You’ll see the difference between a CFD trade and a stock trade and get an insight into the pros and cons of CFD trading.
With simple, clear videos you’ll look at a trade from two points of view – as a Stock purchase and via a CFD.
CFDs are not at all as complicated as they might appear at first glance. The basic principle is that they allow an investor wishing to maximize the potential of their available cash a way of profiting on underlying assets that they don’t actually own. And CFDs allow you to benefit from a falling market. Let’s explore.
- What they are and how they work
- The difference between a CFD and a stock trade
- Margin and leverage
- The pros and cons of CFD trading
Please note that Saxo Academy is property of Saxo Bank A/S. The materials published on Saxo Academy should not be considered as financial, investment, tax, trading or other advice, or recommendation to invest or disinvest in a particular manner. Saxo Markets assumes no liability for any losses resulting from trading in accordance with a perceived recommendation or reliance on Saxo Academy materials. Following or replicating other traders involves risk. Past performance of a trader is not indicative of future results.