In the financial market CFD (Contract for Difference) represents the contract between the buyer and seller where the seller pays the buyer the difference between the opening and closing prices of the contract. In case the difference turns out to be negative it’s the buyer who pays and not the seller.
Traders have a chance to take an advantage from price moving up and down. In case of prices moving up they can open long positions and while the price moves down similarly they are free to open short position speculating on the market.
CFD trading is realized by individual traders and CFD providers. As there do not exist standard contract conditions each CFD provider specifies his own. It is opened when starting to trade on a specific instrument with the CFD provider.
When closing the position the difference between the opening trade and the closing trade turns out to be loss or profit. In case the CFD does not expire those positions that are remained open overnight will be rolled over.
Since CFDs are traded on margin the trader should keep the minimum margin level all the time to keep the position open. In case the sum of money deposited falls below the minimum margin level the trader will get a margin call and he will have to pay additional money into account. In case of not quickly covering these margins, the positions will be liquidated.
CFDs give you an opportunity to open long and short position. You choose Long Trade when buying an asset and expecting its further rising. In case of Short Trade you sell an asset expecting the price falling as you will be able to buy it back at a cheaper price. In the ordinary share market shorting is hardly possible, however CFDs let you go short as easily as you go long. It provides you with the ability to make profit even if the asset price drops but you trade in the right way.
Advantages of Contracts for Difference (CFDs)
Risks of Contracts for Difference (CFDs)
The whole logic of CFD trading is quite simple and has much in common with traditional currency trading. You can find Equity CFDs on Equities, Stock Indices and Commodity CFDs, containing more than one hundred trading tools, on the trading platform NetTradeX.
Traders have a chance to take an advantage from price moving up and down. In case of prices moving up they can open long positions and while the price moves down similarly they are free to open short position speculating on the market.
CFD trading is realized by individual traders and CFD providers. As there do not exist standard contract conditions each CFD provider specifies his own. It is opened when starting to trade on a specific instrument with the CFD provider.
When closing the position the difference between the opening trade and the closing trade turns out to be loss or profit. In case the CFD does not expire those positions that are remained open overnight will be rolled over.
Since CFDs are traded on margin the trader should keep the minimum margin level all the time to keep the position open. In case the sum of money deposited falls below the minimum margin level the trader will get a margin call and he will have to pay additional money into account. In case of not quickly covering these margins, the positions will be liquidated.
CFDs give you an opportunity to open long and short position. You choose Long Trade when buying an asset and expecting its further rising. In case of Short Trade you sell an asset expecting the price falling as you will be able to buy it back at a cheaper price. In the ordinary share market shorting is hardly possible, however CFDs let you go short as easily as you go long. It provides you with the ability to make profit even if the asset price drops but you trade in the right way.
Advantages of Contracts for Difference (CFDs)
- Availability to trade on margin which will help you enhance your trading capital
- Making profit from market rising and falling
- Lack of taxes and hidden commissions which results in cost reduction
- Availability of at least 80 stock CFDs, major Equity Indices and commodity CFDs
- Availability of unique Golden Instruments
- Providing favorable and beneficial Swap conditions
Risks of Contracts for Difference (CFDs)
- Availability of trading on margin not only increases the extent of profit but also losses. Therefore you should place stop loss order to escape large losses in case your position moves against you.
- It is more risky for long term investors; by holding a CFD open over a considerably long time the costs may increase and it would be more beneficial to have bought the underlying asset.
The whole logic of CFD trading is quite simple and has much in common with traditional currency trading. You can find Equity CFDs on Equities, Stock Indices and Commodity CFDs, containing more than one hundred trading tools, on the trading platform NetTradeX.
Editors’ Picks
EUR/USD retreats below 1.1750 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades below 1.1750 on Friday. Although trading conditions remain thin following the New Year holiday and ahead of the weekend, the modest recovery seen in the US Dollar causes the pair to edge lower. The economic calendar will not feature any high-impact data releases.
GBP/USD struggles to gain traction, stabilizes above 1.3450
After testing 1.3400 on the last day of 2025, GBP/USD managed to stage a rebound. Nevertheless, the pair finds it difficult to gather momentum and moves sideways above 1.3450 as market participants remain in holiday mood.
USD/JPY strengthens above 156.50 as BoJ’s cautious tightening weighs on Japanese Yen
The USD/JPY pair gains ground to near 156.75 during the early Asian session on Monday. The Japanese Yen softens against the US Dollar as traders have been disappointed with the slow and cautious pace of the Bank of Japan’s monetary tightening.
Editors’ Picks
EUR/USD retreats below 1.1750 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades below 1.1750 on Friday. Although trading conditions remain thin following the New Year holiday and ahead of the weekend, the modest recovery seen in the US Dollar causes the pair to edge lower. The economic calendar will not feature any high-impact data releases.
GBP/USD struggles to gain traction, stabilizes above 1.3450
After testing 1.3400 on the last day of 2025, GBP/USD managed to stage a rebound. Nevertheless, the pair finds it difficult to gather momentum and moves sideways above 1.3450 as market participants remain in holiday mood.
Gold climbs toward $4,400 following deep correction
Gold reverses its direction and advances toward $4,400 after suffering heavy losses amid profit-taking before the New Year holiday. Growing expectations for a dovish Fed policy and persistent geopolitical risks seem to be helping XAU/USD stretch higher.
Cardano gains early New Year momentum, bulls target falling wedge breakout
Cardano kicks off the New Year on a positive note and is extending gains, trading above $0.36 at the time of writing on Friday. Improving on-chain and derivatives data point to growing bullish interest, while the technical outlook keeps an upside breakout in focus.
Economic outlook 2026-2027 in advanced countries: Solidity test
After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.
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