CFDs, Contracts for Difference, have become very popular over the last few years and account for over 30% of the volume traded on the London Stock Exchange. They are an efficient way to trade shares.
CFDs can be traded in various ways as a hedge to a portfolio or for short term trading purposes. As these instruments are leveraged and carry finance charges it makes them more expensive to hold positions for investment purposes. [more...]
CFDs do carry a high risk as they are leveraged and therefore may not be suitable for everyone. They are aimed generally at professional traders including hedge funds, and private equity - those who understand the logistics and operation of leveraged and margined products... [more...]
In particular you must be aware that in trading CFDs your potential losses can exceed your initial stake.
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