6 Replies to “The Truth About CFDs”

  1. CFD’s sound interesting, but also much more risky than regular options. How much more leverage can you get with CFD’s than with options? You mentioned that CFD’s are not really regulated so is there enough leverage to be worth all of the added risk?
    It sounds, to me, a lot like the old time stock market system.

    1. CFDs work similar to stocks. The main difference is that you can get much more leverage. The amount of leverage really depends on the broker. Many legit brokers offer up to 1:200 leverage. But too high leverage is not good either. Very high leverage can lead to big losses very fast. So please be careful when trading with high leverage.

  2. I have been trying to learn more about investment opportunities, and have been very confused by CFDs. I love your explanation of basically it’s a bet. You bet someone, a broker, that the price will go up and in turn, they are betting it will go down. That is the best explanation I have heard. That really makes sense to me. I like the no commission aspect also, but like you said, they are making money somewhere on the deal. You did a very thorough job of laying out the pros and cons of CFDs, I will definitely read more of your posts. Thanks for sharing.

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