CFDs

CFDs, or Contracts for Difference, are synthetic equity products that reflect the price movements of the underlying stock. Trading is similar to normal dealing on shares with all its benefits except for delivery or physical ownership of the shares, which is not permitted.

The advantage of CFD trading over physical share trading is the ability of a client to diversify a stock portfolio without a big capital outlay, added leverage, lower cost of trading, and the elimination of exchange fees. CFD trading also allows the investor to take advantage of a declining market by selling short, which on many occasions is difficult in actual stock trading.

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