Good afternoon, dear traders!
Today I bring to your attention a very interesting investment tool – CFD or CFD. The tool itself is not new, it appeared in the 90s in England, however, the popularity began to gain right now.
By tradition, let’s start with the definition. So, what does this mean for you as a trader:
CFD (from English Contract For Difference ) or a contract for difference is an agreement between a trader and a broker about transferring to each other a certain amount of the difference in price between the value of an asset at the moment and its value at the time of completion of the contract.
As assets for the conclusion of such contracts can serve as currency (Forex), commodities, indices, stocks and other securities. When concluding a CFD, both parties imply that the assets will not be acquired in fact, the object of the transaction is only the difference in their price. This makes it possible for a trader to receive income only from raising or lowering the price of a product or stock.
To make it clearer, I will give an example.
You have decided to buy 100 shares of MicroSoft . Instead of a long and complicated procedure of actually acquiring them on the stock markets, you acted easier and bought contracts for price difference for the same amount. Further, your financial result will depend on the actual behavior of MicroSoft’s shares on the market, although in fact you do not actually own shares. Suppose each share has fallen in price by $ 3. Your loss will be 3×1000 = $ 300. And if each share went up by $ 3, you get $ 300 profit. As you can see, everything is simple.
CFD broker: whom to choose?
One of the most prominent international suppliers of CFD contracts is the Alpari broker . Unlike other brokers who consider contracts for difference as an additional service, Alpari focuses on CFD professionally. This could not but bear fruit – for 7 years of work the broker has become the market leader in this niche. A full review of the broker can be read here .
The main advantage of Alpari is an innovative proprietary trading platform, convenient and fast, specially “honed” to work with CFD contracts. Thanks to her, traders get instant access to the markets of the USA, UK, Europe and Asia.
CFD contracts at Alpari broker are available on ECN.MT4, PRO.ECN.MT4 and ECN.MT5 accounts
Alpari also provides several exclusive offers available to visitors to our site:
1. Drawing of 3 cars with a total cost of $ 175,000
2. Cashback to all traders
- simplicity and availability of trade;
- the possibility of instant trading in shares of major corporations and other assets;
- the ability to quickly make a portfolio of stocks;
- no costs and delays in the physical transfer of assets;
- no registration and charges for safekeeping of assets;
- the possibility of applying leverage – you can trade assets for a much larger amount than your deposit.
Lack of CFDs
- When you purchase a CFD, you will not have access to all the voting rights that arise when you receive ownership of shares
If your goal is just earnings on the movement of stock prices, raw materials or other assets, CFD contracts are a great option that will simplify the task as much as possible and save you a lot of time and nerves.
The best broker for working with contracts – Alpari. It offers the best CFD platform to date, trading conditions and a bonus package.