• Step 1 - An Introduction to CFD trading
• Step 2 - Trading on a Margin
• Step 3 - Going Long and Shorting
• Step 4 - Interest and Dividends
• Step 5 - Commission
• Step 7 - Opening a Long CFD Position
• Step 8 - Opening a Short CFD Position
• Step 9 - Pros & Cons of CFDs
• Step 10 - Spread Betting vs. CFD Trading
• Step 11 - Stop Loss
• Step 12 - Guaranteed Stop Loss
• Step 13 - CFD vs. Traditional Investment

What is a CFD?

A CFD is a Contract For Difference. The contract refers to the agreement between a broker or CFD company and its client, the trader.

It is an agreement to exchange the difference between the price of a share at the opening and the price of a share at the closing of a particular trade. This will either result in a profit or a loss for the trader.

CFDs are traded on margins and, as with Spread Betting, profits can be made from falling markets as well as rising markets because the trader does not actually own the shares.

CFD trading is a commonly used financial tool that is popular with investors because it allows them to purchase the right to buy or sell a contracted amount of shares in a given stock at a certain price, for a pre-determined period of time.