CDF’s are leveraged products, mainly traded in UK and other EU region. CFD’s mimic the underlying pretty much like a futures instrument. However in CFD’s the concept of a lot size is not there…for example : You can buy 1 unit of FTSE CFD buy paying a certain margin, usually as low as 2-5%.
1 Like
As the name suggests, one needs to pay only the difference between the entry & exit price in a trade. It is a leveraged product and unlike Futures, in CFD’s you wont own the underlying. CFD’s are not governed by any exchanges as it is traded in over-the-counter market.
With the increasing popularity of Forex market in the last 8 years, similar leveraged product, CFD was introduced to include stocks, indices, commodities for leveraged trading. Basically, as an alternative hedge position on low margin for regular trades done on exchanges.
I believe it is a ‘Old Wine in a New Bottle’ with extra KICK!
1 Like
I would also like to know if there is expiry for CFD. like F&O…
thank you…
thank you…