What are CFDs
CFDs or Contracts for Difference is an agreement between two parties to exchange, at the close of the contract, the difference between the opening price and closing price of the contract, multiplied by the number of underlying stocks specified in the contract. CFDs are traded in a similar way to ordinary stocks and used as an alternative instrument to stock trading. It allows the investors to:
- Gain exposure to stock price movements, without the need for ownership of the underlying stocks; and
- To take long or short positions by placing a cash deposit (known as margin) as collateral instead of paying the full contract value of the underlying position.
CFDs generally do not have an expiry date, with the exception of CFDs on Futures. As long as the investor is able to maintain his account in good standing with us, the investor is able to hold the position indefinitely*.
* Please refer to Terms and Conditions Applicable to Contracts for Difference ("CFD Terms and Conditions") for full details.