A Contract for Difference (CFD) is a contract made between a buyer and a seller for a specified product, where one party agrees to pay the other the price difference between the opening and the closing price of the contract.
CFD trading offers investors access to the financial markets, without buying physical/underlying products. Instead, they purchase contracts speculating on future price actions.
With FXTM, you can trade CFDs on some of the most prominent securities in the U.S., Europe, Australia and Asia. These include, but are not limited to:
CFDs are popular with traders because they offer a low-cost entry into the financial markets. Leverage means that traders only need to invest a fraction of the total cost of the contract themselves, enabling them to potentially generate a greater return. However, leverage cuts both ways, and has the same potential to increase losses, as it does to maximise profits.
Trading CFDs on Indices is more costly than trading the underlying index, while offering equal potential to deliver gains. If a trader has a CFD on a long position and the index appreciates, they could even make a greater profit than an investor holding the physical stock. Similarly, they could also make a greater loss if the price declines.
CFDs on Indices are available with both instant and market execution. This means your orders are executed with no delay, guaranteeing you fast and efficient trading.
For a full list of Spot Indices offered by FXTM for CFD trading, please visit our Contract Specifications page.