A contract for difference (CFD) is a contract between two parties in which one pays the other a certain sum of money based on the difference between the current value (price) of the CFD's underlying financial asset and its value (price) at a specific future date.
If the difference is positive, the CFD provider pays the CFD buyer, whilst if negative, the CFD provider receives the sum by the CFD buyer.
CFDs can be considered as financial derivatives which allow market participants (buyers or sellers of CFDs) to take advantage of either the underlying price uptrend (for long positions on CFDs or a position traded to take advantage by an uptrend of the underlying asset ) or of the underlying price downtrend (for short positions CFDs or a position traded to take advantage by a downtrend of the underlying asset).
CFDs are traded daily in Europe and in Asia but not in the USA because of the SEC's restrictions.
Considering the complexity of CFDs , trading is more advisable for professional and experienced market participants rather than individual retail investors (see recent ESMA/EBA/FSA warnings http://www.esma.europa.eu/news/ESMA-and-EBA-warn-investors-about-contracts-difference).
The Exchange accepts no responsibility for the content of the website you are now accessing or for any reliance placed by you or any person on the information contained on it.
You will be redirected in five seconds.
You are accessing the London Stock Exchange Annual Report Service powered by PrecisionIR.
The Exchange accepts no responsibility for the content of the reports you are now accessing or for any reliance placed by you or any person on the information contained therein.
You will be redirected in five seconds