Contract for difference, referred to as CFD, is a contract based on the difference between the price of the target.The physical physical transaction.
The concept may be more abstract. Let's give an example for everyone to understand:
Suppose Xiao Wang believes that the price of pork is about to rise, and Xiao Zhang believes that the price of pork is about to fall, so they set up a contract. If the price of pork rises, Xiao Zhang will get the increase in the increase of the increase; if the price falls, the little king will moveThe difference between the decline was to Xiao Zhang.
For example, the price of pork is 16 yuan a pound. If it rises to 18 yuan a pound, Xiao Wang earns a difference of 2 yuan, and the corresponding small loss of 2 yuan; if the price of pork drops to 14 yuan per catty, the small Zhang earns the difference of 2 yuanXiao Wang lost 2 yuan.The transaction does not involve any physical delivery of pork.
The difference between the difference between the trading of the transaction includes various types of stock indexes, the United States index and other types of indexes, crude oil, precious metals, etc., which are margin transactions and have high risks.Different from futures margin transactions, the investment target does not involve any physical objects, and there is no physical delivery date.
Among them, the advantages of trading CFD include:
The use of margin transactions, the difference contract is traded with margin. This investment method using leverage investment will be higher, but at the same time, it will amplify the income and risks brought by market fluctuations.
Do more short and two -way transactions.Buying is to do more; selling is short.Because the difference contract does not involve physical delivery, investors of the difference contract have the opportunity to make a profit in the bear market and bull market.
The difference contract provides you with a way to invest in a variety of products with one account.
