Description
With CFDs you can trade Corporate Shares, Indices, ETFs and Commodities listed on a Stock or Futures exchange.
CFDs are contracts that allow an investor to receive the difference between the closing price and opening price if holds a long position, or the difference between the opening price and closing price if holds a short position.
Long position means that the investor first buys the asset (opening price) and then sells it (closing price). Thus, the gains can be obtained only if the price of the underlying asset (Indices, ETFs...) rises (if the difference between the closing price and the opening price is positive).
Short position or short selling means that the investor first sells the asset (opening price) and then buys it (closing price). Thus, the gains can be obtained only if the price of the underlying asset falls (Corporate Shares, Commodities ...).
To open a position with CFDs, the investor has to deposit a margin that serves as collateral against potential losses while maintaining the position opened. This margin is defined as a percentage of total exposure (the opening price multiplied by the negotiated amount). Typically, the margin for Corporate Shares, ETFs and Commodities is between 5 to 10%.
CFDs are bid / ask quoted (eg. Google: 300 bid / ask 301 USD). For investors who want to buy ask price applies. For investors who want to sell bid price applies.
