CFD or Contract for difference is a contract between two parties, typically described as the buyer and the seller, which price is typically based on the underlying asset, for example an equity index, a single stock or commodity futures. PowerPoint PPT presentation

Title: Introduction to CFD

Introduction to CFD

What is CFD

CFD or Contract for difference is a contract

between two parties, typically described as the

buyer and the seller, which price is

typically based on the underlying asset, for

example an equity index, a single stock or

commodity futures. At the end of the contract or

when counterparties decide to close position the

What is CFD

• Acceleration/Deceleration (AC) Oscillator

In effect CFDs are financial derivatives that

allow traders to gain exposure on a variety of

assets, allowing take long positions when prices

of the underlying move up and short

positions when prices move down. Being tied to

the underlying asset the CFD price moves exactly

in the same direction as the price of the

underlying and depends on the same factors. At

the same time, being much more flexible and

accessible, CFD trading offers a number of

advantages compared to trading the underlying

Why Trade CFDs

• Acceleration/Deceleration (AC) Oscillator

CFD (Contract for Difference) is a contract

between two parties known as buyer and seller

who agree on exchanging the difference between

opening and closing prices of the contract. CFD

trading offers a number of advantages over

trading the underlying asset directly. In

addition to currencies, contracts for difference

provide great opportunities for traders wishing

to gain exposure on different markets. Enjoy the

following benefits of CFD trading Enjoy the

following benefits of CFD trading

Why Trade CFD

• Acceleration/Deceleration (AC) Oscillator

Fast access to many markets and the most liquid

assets through one brokerage account, providing

considerable diversification opportunities Leverag

ed positions with the use of margin able to

enhance profits Cost reduction due to absence of

taxes and hidden commissions Ability to take long

or short side trading without limitation Ease of

trading from anywhere in the world by using a

computer and IFC Markets trading

Why Trade CFD

• Acceleration/Deceleration (AC) Oscillator

Moreover with IFC Markets there are numerous

unique benefits of CFD trading More than 80 CFDs

on stocks, CFDs on major Equity Indices and

commodities Unique Golden Instruments offered

through IFC Markets trading platform Unique

swap/rollover policy, based on free-borrowing

concept of non-currency assets Unique ability of

trading continuous CFDs on Indices even after the

stock exchange closes Unique ability of trading

continuous CFDs on commodities futures without

the need to follow expiration dates Combination

of these benefits has converted CFDs into a

popular investment, speculative and hedging tool

for both retail traders and institutional

CFD Markets

• Acceleration/Deceleration (AC) Oscillator

CFD contracts are traded in the most of the

developed world. Because of the ability to trade

CFDs on margin those are actually financial

instruments that are generally traded by

financial institutions to hedge against ownership

on original assets, and by individuals and retail

traders that speculate on its price

direction. CFDs were firstly traded on stocks of

the London Stock Exchange in early 1990,

initially available to only institutional traders

to hedge their exposure on the underlying share.

At the end of 1990s CFDs were introduced to

retail traders and together with the development

in computerized system became very

CFD Markets

• Acceleration/Deceleration (AC) Oscillator

Thanks to low costs, leveraged positions and time

saving benefits, CFD trading has been gaining

more and more popularity throughout the past

decade. Today the CFD market has developed a lot

since the first CFD contracts and offers huge

variety of underlying financial instruments

ranging from stocks, equity indices, and

currencies to commodities, bonds and

How to Trade CFDs

• Acceleration/Deceleration (AC) Oscillator

CFDs on Equities, Stock Indices and Commodities,

totaling more than one hundred trading

instruments, are now available in the trading

platform NetTradeX for all the clients of IFC

Markets. The logic of CFD trading is quiet simple

and is very similar to traditional currency

trading. The client can either buy a certain

number of CFDs expecting a rise of the underlying

asset or sell CFDs expecting a drop of the

underlying assets price. Later on an opposite

transaction is made to close position. This is

the first very important feature of CFD trading

as profits can be made on both rising and falling

How to Trade CFDs

• Acceleration/Deceleration (AC) Oscillator

CFDs are traded on a margin basis. In other words

the client is able to open a position having

deposited only a small portion of a contracts

value depending on his account type and on the

contracts margin requirements. This is a very

important advantage as leverage can raise profits

considerably. However there is also a risk of

increasing financial losses in case of

unfavorable price movement of the underlying.

This is why traders are required keep funds to

fulfill any unfavorable move against their

position and at any time the margin requirement

must be maintained to keep the position