WHAT ARE CFDS
A Contract for Difference (CFD) is a trading instrument which allows you to make a profit or loss by reference to fluctuations in the price of the underlying Asset, without actually owning the underlying Asset. The amount of the profit or loss will be the difference between the price when the CFD position is opened and the price when it is closed.
The contracts require a deposit which is smaller than the contract size, this means the contract is leveraged. Which allows you to maximize your potential profits if your prediction is correct.
A position is opened by ‘buying’ or ‘selling’ a CFD:
BUYING – If you expect an instrument (be it a stock, currency, commodity, index price) to rise, you buy the CFD.
SELLING – If you expect an instrument (be it a stock, currency, commodity, index price or other) to fall, you sell the CFD.