Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Yield definition

Yield is the income earned from an investment, most often in the form of interest or dividend payments. Yield is one of the ways in which investments can earn a trader money, with the other being the eventual closing of a position for profit.

Most often, yield will be expressed as a yearly percentage of either the value of the original investment, or of its current market value.

The two assets that are most commonly associated with yields are equities and bonds. Equity yields are usually given as a percentage of the current equity price of a company. That means that an investor who sees the value of their shares increase will see greater return on their investment if dividend levels remain constant.

Bond yields can be given as either a percentage of the bond price when it is issued, a percentage of the current price of the bond, or an estimate of what the bond’s yield will be if it is held to maturity.

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