A Contracts for Differences (CFDs) is an agreement between two parties to exchange the difference between the opening price and closing price of a contract.
CFDs are derivatives products that allow you to trade on live market price movements without actually owning the underlying instrument on which your contract is based.
You can use CFDs to speculate on the future movement of market prices regardless of whether the underlying markets are rising or falling. You can go short (sell), allowing you to profit from falling prices, or hedge your portfolio to offset any potential loss in value of your physical investments.
Similar to trading Forex, CFDs allow investors to hold both “long” and “short” positions granting the retail trader with the opportunity to profit in either a rising or falling stock market. Additionally, investors have the convenience of limiting losses or claiming gains by using stop losses and limit orders.
Because CFDs are traded on margin rather than paying the full value of a transaction, the investor only needs to pay a percentage when placing a trade. Trading with margin grants the investor with leverage, which in turn allows the investor to access a larger amount of shares than buying or selling actual stock shares. By offering CFDs, we are allowing our investors to speculate on instruments and markets that may otherwise be unavailable or difficult for them to trade.
The CSI 300 is a capitalization-weighted stock market index designed to replicate the performance of 300 China A shares traded in the Shanghai and Shenzhen stock exchanges, compiled by the China Securities Index Company. CSI 300 is designed for use as performance benchmarks and as basis for derivatives innovation and indexing.
The Hang Seng Index (HSI) was started on November 24, 1969, and is a freefloat-adjusted market capitalization-weighted stock market index in Hong Kong. It is used to record and monitor daily changes of the 50 largest companies of the Hong Kong stock market and is the main indicator of the overall market performance in Hong Kong.
The DAX is a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. DAX measures the performance of the Prime Standard's 30 largest German companies in terms of order book volume and market capitalization. The DAX was started on 30 December 1987 with a base value of 1,000.
The Dow Jones Industrial Average is a stock market index consisting of the 30 large publicly owned companies based in the United States, and one of several indices created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. The industrial average was first calculated on May 26, 1896.
The NASDAQ-100 is a stock market index made up of 107 equity securities issued by 100 of the largest non-financial companies listed on the NASDAQ. It is a modified capitalization-weighted index. The stocks' weights in the index are based on their market capitalizations, with certain rules capping the influence of the largest components.
The Financial Times Stock Exchange 100 Index, also called the FTSE 100 Index, is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization maintained by the FTSE Group. It is seen as a gauge of prosperity for businesses regulated by UK company law. The index began on 3 January 1984 at the base level of 1000.