What are CFDs?

10 Jun

You have probably heard or read about CFDs in netopia. I mean, it is the buzz now a days. With CFDs getting more and more popular, people are opting to invest on it aside from shares of course.

So, what are CFDs?A CFD is a contract between you and the company that you are using to make the purchase. You trade the same shares as those listed on the stock exchange, but in a simulated market environment. For example, if you were to buy 1000 National Australia Bank Share CFDs, you would have a contract with the CFD provider for that trade. A shareholder, on the other hand, actually owns a stake in the company. In short, a CFD offers the benefits of trading shares by mirroring the performance of the share or index, without the need to actually own them.

The increasing demand for CFDs as another mode of investment has paved the way for continued growth and they are now being offered by many different providers in the market place. There are companies that specialise in CFD trading only to brokers that have added CFDs to their current range of trading instruments. And they all offer their own platforms, strategies, perks and range of CFDs you can trade. Making it harder to choose a good CFD provider and you need to spend time researching all the different choices each provider has to offer.

The good news is there is an exclusive deal accessible through Smart Trading with trading CFDs…know more about this in the next blog.

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