CFD

CFD

CFDCFD is a contract for change of price of a financial instrument: futures, option or forward. CFD is an abbreviation of Contract for difference. When a CFD contract is concluded, an investor agrees that the basic asset will not be delivered to him, and he will only earn at the price difference. Thus, CFD is a purely speculative instrument. Now an increasing amount of broker companies offer stock and commodity futures trading just in the form of CFD contracts. CFD contracts can be concluded virtually for any instruments. CFD contracts have their advantages and disadvantages.


The basic advantages of CFD are:

  • possibility of selling cfd at any time
  • low commission and margin calls
  • possibility of investment portfolio hedging by cfd instruments
  • quick dealing

A disadvantage of CFD is inability of a client to claim for sharing of the profit of a company whose shares he purchased, and he is actually not a shareholder of this company.

For details about CFD contracts go to the following link:

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