What is CFD in forex?
- Thread starter PIPruit
- Start date
Solution
CFD stands for Contracts for Differences. When you buy or sell a CFD, such as a CFD on gold, for example, you are not buying or selling the physical gold itself. Instead, you are trading a contract that enables you to make or lose money depending on how the price of actual gold moves.
To clarify this further, let us assume you bought a CFD on gold at the price of $1300 per ounce. Then the price moved up to $1350. The difference in price here is $50, which is what you gain. If the price dropped to $1250 then the difference here is -$50, which is your loss. You make or lose money based on the difference in price, which is why those contracts are called contracts for differences.
There are CFDs on various types of...
To clarify this further, let us assume you bought a CFD on gold at the price of $1300 per ounce. Then the price moved up to $1350. The difference in price here is $50, which is what you gain. If the price dropped to $1250 then the difference here is -$50, which is your loss. You make or lose money based on the difference in price, which is why those contracts are called contracts for differences.
There are CFDs on various types of...
ElektraG2025
Private
- Messages
- 13
Oh my god, first days I started trading, it was really hard to understand CFD. And still maybe couldn't understand it perfectly.
Seenad
Recruit
- Messages
- 7
But it was already answered a while ago. The person on the first page explained everything with lots of details. Why do we keep answering the same question?
