Contract for Difference or as it is shortly known as CFD is the contract that is signed between two parties, namely the buyer and seller. Its price is strongly connected to the underlying asset like an equity index, a single stock and commodity futures.

1. About CFD Trading
Contract for Difference or as it is shortly known as CFD is the contract that is signed
between two parties, namely the buyer and seller. Its price is strongly connected to the
underlying asset like an equity index, a single stock and commodity futures.
Being firstly traded in early 1990 on the stocks of London Stock Exchange CFDs were
obtainable only to the institutional traders. They used them to hedge their exposure on
the underlying asset. However, already at the end of 1990s CFDs became widely
accepted by retail traders and they go on to attract numerous traders up till now.
A lot of advantages such as leveraged positions, low costs and time saving benefits have
contributed highly to the development of CFD market. The latter provides a great
number of financial tools including stocks, commodities, derivatives, equity indices and
currencies to bonds.

2. While deciding to close the position the parties take into account if the asset price has
increased, the seller is going to pay the buyer the difference between the initial value of
asset and its current value. Otherwise, i.e. in case of the decrease in asset value it’s the
buyer who pays.
CFD is a unique opportunity for traders to get experience on various assets. They can
take long position when the price moves up, and short position when the price goes
down.

3. CFD trading is actually more beneficial than trading the given asset directly.
It is featured with the following benefits:
• Highly liquid assets and quick access to a number of markets through one brokerage account
• Possibility of opening leveraged positions through margin which helps to enhance the profits
• Cost reduction because of the lack of taxes and hidden commissions
• Unlimited opportunities of taking long or short side trading
• Possibility to trade easily from diverse parts of the world
• Availability of 80 and more commodities, CFDs on stocks and major Equity Indices
• Accessibility of unique Golden Instruments
• Unique swap terms
• Continuous trading of Index CFDs after the closure of stock exchange.

4. IFC Markets offers beneficial conditions for CFD trading:
• Trade More 80 trading Instruments - Stock CFDs, Index CFDs and Commodity CFDs.
Leverage – 1:40
100% Dividends Payout
0,1% Charge on Stock CFDs
• Unique swap/rollover policy - based on free-borrowing concept of non-currency assets
• Unique ability of trading Index CFDs - even after the stock exchange closes
• Unique ability of trading continuous Commodity CFDs - without the need to follow expiration dates
One of the advantages of trading CFDs with IFC Markets is that it offers two CFD trading
platforms – MetaTrader 4 and NetTradeX.

5. On the trading platform NetTradeX it’s possible to find Commodities, Stock
Indices and CFDs on Equities including one hundred trading tools. The whole concept
and procedure of CFD trading is quite simple and has much in common with
traditional currency trading. The trader buys CFDs expecting an increase in price value
of the underlying asset or similarly sells them anticipating a decrease in the price of
the underlying asset. This is the main factor of CFD trading as due it traders can make
a profit depending on the market movement up and down.
The next essential feature of CFD trading is that it is traded on a margin basis. In other
words a trader has a chance to open a position by depositing a very small portion of
the total contract’s value based on the type of account and on the contract’s margin
requirements. However, together with the increase of profit the probably of losses
also rises. Hence traders should keep funds to accomplish any undesirable move
against their position and maintain margin requirements to keep the position open.