"CFD", or "Contract for Difference", was developed to allow clients to receive all the benefits of owning a stock without having to physically own the stock itself. For example, instead of purchasing 1,000 shares of Microsoft from a stock broker, a client could instead buy a CFD on Microsoft on a CFD trading platform. A $5 per share rise in the price of Microsoft would confer to the client a $5,000 profit, just as if he had purchased the actual shares that are traded on the exchange. A major difference is that there are no exchange fees and many of the inefficiencies of trading the underlying shares on the exchange are eliminated. Many CFD brokers can therefore offer CFDs with zero commissions and very attractive margin requirements. CFDs have grown in popularity dramatically over the past few years, and we believe that this will increasingly be the preferred way to trade the financial markets.
The other major benefit of trading a CFD is the fact that the client can trade on margin. CFD trading means clients can trade a full portfolio of Shares, indices, or commodities without having to tie up large amounts of capital. Using the example above, a client purchasing $50,000 worth of CFD Shares will only be asked for $1,000 margin.
As with Shares, CFD investors benefit from normal market movements. Clients' open positions are valued in real time, with every tick of the market. Profits or losses similarly are credited to or debited from the clients account equity in real time. Most CFD brokers offer trading in numerous countries and exchanges including Australia,America and the UK.
Listed below are financial institutions that offer CFD or Contracts For Difference trading.
GCI FINANCIAL CFD'S-GCI clients can trade individual share prices of major North American, European, and Asia/Pacific companies - with zero commissions, low margin requirements, and state-of-the-art online software.
ONLINE CFD'S.COM-onlineCFDs.com is a site for those who want the benefits of trading equities using Contracts for Difference (CFDs).
IG MARKETS- great product and easy to use trading platform with excellent service.
CMC MARKETS-CMC Markets is a world leader in online CFDs, Spread Betting and Foreign Exchange, offering professional trading for private investors in global financial markets.