CFD (Contract For Difference, CFD) — contract for difference of various underlying assets. Most often they are the assets that are traded in financial markets. At the conclusion of such a contract one party agrees to transfer to the other side of the difference between the current value of an asset and its value at the end of the contract. In this case, the contract does not involve the transfer of ownership of the underlying asset.
Usually CFD is not specified for expiration date, and the contract can be terminated with a request of one of the parties, which granted such a right.
CFD-contracts emerged in the 1980s. in England. Those times they were entered only for difference in the stock price. Today, it is possible to enter into these contracts at almost all exchange instruments.
Before CFD was appeared, only participants with big business could trade on the instruments of international trade exchanges (eg, equity and commodity), as the cost of entering into a transaction on the stock exchanges is counted in the hundreds of thousands of dollars. CFD opened an access to trading on the stock exchange instruments to the wide range of individuals with very different levels of capital. For the entering into such contracts it is enough to have from $ 2,000 in the account.
BENEFITS OF CFD
During the trading CFD with TeleTrade you are able to:
- Make profit with any trend in the market: at the increase as well as at the decrease in the prices of assets.
- Choose from a huge set of markets and instruments of trade.
- Making the international equity and commodity markets with low start-up capital.
- Insure your financial risks from price changes in the future.
- Receive dividends (if the underlying assets of cfd contract are shares) *.
* when trading cfds teletrade establishes an amendment on dividend – «dividend adjustment»: the amount is to be charged to the client in case if the date of receipt of the dividends from the client position is open for the purchase and is deducted if on sale.
TELETRADE GIVES THE OPPORTUNITY TO EARN THROUGH CFD BASED ON THE FOLLOWING UNDERLYING ASSETS:
- Shares of the New York Stock Exchange, which has large companies such as Bank of America, General Electric Company, Intel Corporation, Johnson and Johnson, Coca-Cola Company, McDonald's Corporation, and many others;
- futures on the stock indexes.