What are CFDs?

December 1, 2022

CFDs, or Contracts for Difference, are financial instruments that allow traders to speculate on the price movements of an underlying asset without actually owning the asset. CFDs are typically used to trade stocks, commodities, currencies, and other financial instruments. They are a popular tool among traders because they allow for leverage, which means that traders can gain exposure to a larger position with a smaller amount of capital. However, leverage also increases the risk of losses, so it is important for traders to carefully manage their risk when trading CFDs.

“Of over 1000 stock recommendations made by the typical brokerage firm during the first quarter of 2001 (the peak if the bull market), only 7 were sell recommendations.” – John C. Bogle

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