CFD trading definition

CFD trading is the speculation on financial markets via contracts for difference (CFDs), a form of financial derivative

A CFD is an agreement between two parties to exchange the difference in price of an asset from when the position is opened to when it is closed. CFDs allow investors to trade market volatility across several asset classes without the need to own the underlying asset.

CFD traders attempt to profit from assets moving in either direction, as CFDs can be both bought (going long) and sold (going short). CFD traders make use of leverage to gain extra exposure to the markets, amplifying both profits and losses in the process.

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