Contracts for difference
Introduction|
Course|
Q&As |
Recommended reading|
Quiz |
Introduction
Context
This course explains what CFDs are, their advantages and disadvantages compared to ordinary share investing and spread betting, the mechanics of trading, types of order and risk-reducing strategies, and the steps you need to take to get started. Examples and calculators are used throughout the course, and when you finish you will have a thorough grounding in this fast-growing method of short term trading.
Prior knowledge required
The course assumes that you understand the fundamentals of share investing and how stock prices change in the course of a trading day. Basic concepts and terminology are not explained in the course.
Contents
- What are CFDs?
- The benefits of CFDs
- Initial margin
- Variation margin
- Commission costs
- Interest payments
- Dividends
- Example of a long and short trade
- Comparison of CFDs to share investing
- Comparison of CFD trading to spread betting
- Types of order
- Stop losses
- Strategies: Pairs trading
- Strategies: Hedging an equity portfolio
- Opening an account with a broker
- Conclusion
