CFD Trading

What are CFDs anyway. Heard they were hella risky and was more like gambling. Is this true?

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>>1274378
Here's a neat explanation:

>Contracts for difference (CFDs) are a form of derivative trading that enable you to attempt to net a potential profit by speculating on the rising or falling prices of fast-moving global financial markets (or products) such as shares, indices, commodities, currencies and treasuries.

CFDs have low margins & high leverages which also means you can lose a lot. So, pretty risky.

cfd bump

Currently buying bitcoin CFDs, meme magic is real

>>1274384
that picture makes me want to throw up

>>1274384
This isn't a good explanation. That basically describes options.

what actually are they/how do they work/ what are they actually derivitives on?

>>1274320
>derivatives

Enjoy losing your life savings in three minutes.

>>1274805
They're just a synthetic vehicle for trading whatever.
British people can't trade equities as there's a gigantic tax attached. This makes it ridiculously unprofitable (kind of like what that senile fuck wants to do here in the US), so CFD's became popular there.
That way, they're not really buying and selling the stock (or whatever), just a derivative based on it. In a nutshell, they don't incur the assfucking they normally would.

>>1274860
>British people can't trade equities as there's a gigantic tax attached.

I don't understand this at all.

It's like there's a sinister pact between socialists and the shareholder class to deprive the middle class of dividends and actual voice in corporate governance.

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>>1274825
Nah, I'm not that retarded. I'm starting with 100 €, literally play money, bought 2 Bitcoin contracts which cost me 74€ just for shits & giggles. Looking good so far. But now I wish I could have actually spent my life savings.

>>1274934
>implying you're only risking what you're betting

i don't want to believe that CFDs are less risky than a short buy

>>1274864
>I don't understand this at all.
It was a misguided attempt to curb speculative trading (sound familiar?).
Sanders wants to do the same thing in the US, except, instead of charging the tax on just the purchase, he wants to charge it when the sale is made as well.

>>1274805
think of it as an OTC future... albeit without an expiry date and daily interest charges if you hold the position overnight

>>1274864
nothing to do with dividends, it is a stamp duty tax on transactions which kills off active trading... except it doesn't because market makers are exempt and any other professional investors can use a CFD structure via their prime broker...

as can retail investors too - though interactive brokers is the only decent choice... everyone else targeting retail guys operates like a bucket shop aside from IB + IG Markets. But as IG markets is a rip off compared to IB then IB is the only choice for retail CFD trading

>>1274320
Instead of actually trading anything, you place a bet on a stock/commodity/whatever price, usually heavily leveraged, like 20 times.

Think sports betting with your broker as the bookie, but you can lose way more than just your bet.

They usually have a huge spread and high fees. Also your bookie controls when to settle your bet, e.g. when you're down to the credit line they gave you. Which can happen pretty fast - remember the 20x leverage.
German consumer advocates found that there were so many scammers that the whole market may be considered a scam. I think they're even illegal in the US.
It's a product that preys on dreams of making a quick buck with little capital and turning a blind eye on the risk.
So it's tailor made for /biz/, go for it!

>>1276822
operating a bucket shop is illegal in the US