CFD Trading

CFD is a contract for difference in prices that is concluded between a buyer and a seller through the intermediary of a broker. Assets in the contracts for difference may be shares, bonds, gold, crude oil, silver, and copper, as well as major stock indices such as Dow Jones, DAX, NASDAQ, and S&P. The list also includes global currencies and over volatile assets. This financial instrument does not imply actual buying of an asset. It gives private investors an opportunity to earn on constantly fluctuating exchange rates. A trader buys a CFD on the chosen asset and sells it, profiting on the difference in prices.

Such contracts first appeared on the London Stock Exchange in early 90s last century. Further on, trading CFDs became available online thanks to rapid development of technology and sparked private investors’ interest.

CFDs on shares are contracts for difference where the underlying assets are shares in the world’s leading companies such as Apple, Amazon, Microsoft, Google and others. The shares are quoted on major exchanges and over-the-counter securities markets.

The basic idea of CFDs is rather simple – to make a profit, a trader needs to foresee whether the difference between the current price and the future price will be positive or negative.

CFDs on shares are not traded on the exchange market, they only reflect arrangements between buyers and sellers who trade on the over-the-counter market. Thus, traders work bypassing commissions and exchange rules, as CFDs make it easy to speculate on the rising or falling prices, regardless of directions of the underlying assets. A broker is an intermediate party in this process.

To trade contracts for difference successfully, a trader should choose a specialized broker whose main profile is CFD. One of the best companies in this area is InstaForex.

• A huge selection of trading instruments (88 CFDs on US shares). InstaForex clients have opportunity to conclude deals on world stock indices, shares in the largest US companies, as well as commodities.
• There are no restrictions on the size of the deposit. Trading is available for $1 on the account.
• Always fresh and up-to-date analytics, training courses, and signals that novice traders can use.
• The opportunity to use the same account for trading CFDs, currencies, and other instruments.

Important: Conditions for trading CFDs with InstaForex include low margin requirements and commissions, fixed spreads, as well as the opportunity to hold the position for an indefinitely long period.