What is a CFD Trading?

  •     A CFD is a leveraged ‘derivative’ financial instrument. CFDs are categorized as derivatives since their value is derived merely from the value of the traded asset .). When you trade CFDs, you speculate on an underlying asset's price over time. You are essentially speculating on whether the value of an underlying asset is will rise or fall in the future compared to the current price. All CFD brokers allow you trade both ‘long’ and ‘short’.

       ‘Going long’ means buying a CFD in the expectation that the underlying asset will rise in value. ‘Going short’ means selling a CFD with the expectation that the underlying asset will decline in value. In both cases, when you close the contract, you hope to gain the difference between the closing valve and the opening value.
          CFDs do not have a predetermined expiry date like options or futures contracts.
        A trade ends by making a second, ‘reverse’ trade.


    What is ‘leverage’?
    CFDs allow you to speculate on market fluctuation only putting up a fraction of your own money. You are leveraging off the money you do have,. With CFDs, you only have to invest in a small portion of the market value of the position, sometimes as little as 1%. The remaining 99% of the trade value is covered by the CFD broker. Even though you only put up 1% of the value, you are entitled to the same gains or losses as if you had paid 100%. The actual percentage of the market value that you will be asked to put in will vary for different CFD providers, and for different underlying assets.
    This can make CFDs seem very attractive. Even if you don’t have the money to buy the underlying asset itself, you can share in potential
    gains and losses on the value of that asset. The leverage magnifies both gains and losses,

    How is trading CFDs different to trading assets

    Unlike trading actual assets, when you trade CFDs, you are not trading the underlying asset. What you are trading is a contract between yourself and the Broker. 
    The CFD broker

     the success of CFD trading doesn’t just depend on picking the right CFDs to trade. When you trade CFDs, you are relying on the CFD broker to accept and process your trades, make payments owed to you while your trades are closed. to find out which one is the best check out 777options.com