Anyone trading CFDs?

[Banano]

"A CFD is a leveraged ‘derivative’ financial product. CFDs are derivatives because their value is derived from the value of another asset (for example, a share, commodity or market index).

When you trade CFDs, you take a position on the change in value of the underlying asset over time. You are essentially betting on whether the value of an underlying asset is going to rise or fall in the future compared to what it was when the contract was taken out (or executed)."



It is similar to trading shares except when trading CFDs you don't own stock, you just bet on which direction price will go. Leverage up to 95% meaning with $500 you can buy $10 000 worth of stock.

CFDs are big thing in Australia

[fschmidt]

Sounds like it is time to make a bet against Australia.

[Rock]

"A CFD is a leveraged ‘derivative’ financial product. CFDs are derivatives because their value is derived from the value of another asset (for example, a share, commodity or market index).

When you trade CFDs, you take a position on the change in value of the underlying asset over time. You are essentially betting on whether the value of an underlying asset is going to rise or fall in the future compared to what it was when the contract was taken out (or executed)."



It is similar to trading shares except when trading CFDs you don't own stock, you just bet on which direction price will go. Leverage up to 95% meaning with $500 you can buy $10 000 worth of stock.

CFDs are big thing in Australia

Yes, I've traded CFDs through a broker in Singapore. As you say, owning CFDs is essentially the same as owning the underlying asset (bond, stock, etc) on very high margin. Cus minimum margin requirements are as you say typically quite small, like under 5% of asset value. Just as you do holding stocks and bonds directly, you also receive any interest or dividend payments made by CFD's underlying asset during holding period.

It's important to know and accept the interest rate your broker charges for this leverage in the given currency you use. If rate is much higher than market rates and you hold for extended periods, you're leaking a lot in interest payments.

[Moretorque]

Just another aspect of the con job, what are the derivatives now ? up close to 2 quadrillion or something like that.