What Are CFDs? CFD Trading Explained For Beginners

What are CFDs? Contract For Differences is a way to basically "bet" on the price movement of a product, you can trade CFDs or stocks, commodities, indices, forex and more. You don't own or trade the underlying product in any way, you simply trade on the price movement of that product, which is why CFDs are known as derivatives.

Trading CFDs is very risky because CFD brokers usually give leverage to traders, however CFDs allow for easy, liquid and low cost trade of many products that would otherwise be quite difficult to trade on.

CFDs are traded in units, which sometimes correspond to the price of the underlying, but not always.

MoneyZG is a channel about personal investing, trading shares, the stock market and making money online. Videos are not financial advice and are for entertainment purposes only.

[ilhadourada]

Amazing explanation.. finally I understand the really basic details behind CFDs. Thank you!

[jinx]

Very good video, well explained straight to the point!

[zegarp]

Should have mentioned the Swap points, that's pretty important and can very easily surprise a newcomer to the CFDs

[mamansuryaman]

Penjelasannya sangat amat luar biasa sangat detail sekali. Mantap

Salam dari indonesia

[garyuk]

I have lost a fortune in stocks, amc, tesla etc.. ive been doing cfd trading on indices, i dont seam to loose much, , i bought German40 £1000 sold am hour later made £400, kept doing this and made 9k in a week. I also thought you got penalties for holing over night etc, on 212 this doesn't seam the case.. am i missing something

[bjnwright]

Really well explained, thank you. Question, please excuse my ignorance, but what happens if BitCoin gets SEC approval for ETF? I mean, Bitcoin is going to soar, won't everyone just take out a long position on CFD on BTC? Or will the broker halt CFD trading if something like that happens? Seems like if everyone bets on the horse that's absolutely going to win - then the bookies going to lose a lot of money.

[natalias-fkec]

Sounds similar to spread betting, can you explain the difference? I am confused and would love to see an example between CFD, binary trading and spread betting. 😊

[johnholme]

So cfds are a form of derivative, that is they represent a underlying asset. In your example it would be Netflix shares.

[rombusworkmoney]

Isn't this very similar to, if not the same as, regular options (puts and calls)?

[bmns-]

i notice everytime a singapore bank ex-dividend...the orice will gap down to reflect the dividend amount...is it possible to use cfd to short the stock and buy back the next day....will there be any thing to consider..?

[CallumBrooks-hl]

just a quick question do you have to trade CFD's with leverage or can you do it more like shares where you just put in what you have?

[shaunansell]

So are these just another name for Futures?

[jack]

If you don't use leverage, isn't the similar to normal stocks? Other than the fact you don't own the stock?

[SudhaTeja-cyzk]

Spiderman home alone and started trading

[craiggraham]

Just curious, how do you sell something which you do not own?

[rombusworkmoney]

What happens if you don't repay the money a CFD company loaned you?

[RonMatthews-qh]

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