Contracts For Difference (CFD)
CFD ("ContractsforDifference”) is an agreement between Buyer and Seller on the difference of opening and closing prices of various financial instruments. CFD is a very suitable and efficient mechanism for the trading of precious metals, stocks, futures contractsand indices.
Difference between CFD trade and Exchange trade
At CFD trading, an actual supply of the financial instrument for which contract is made does not happen. For instance, instead of actually buying Dow Jones stocks in the stock-exchange you buy contract for difference (CFD) for these stocks.
The advantage of CFD trading is that the trader may both get proceeds from the trade transactions and make the hedging of his investments and his real stocks which he does not wish to sell, but which may bring loss. It means, the investor does not sell and can preserve the stocks he has which incur loss.
CFD trading advantages:
- Low margin requirements. You may trade using deposited amounts that are less than the whole contract amount. This allows you to establish the investment portfolio you wish with smaller funds;
- Possibility of making both Forex and CFD trading through one account;
- CFD allows opening also short positions, as well as the long ones, which was possible for only professional traders before;
- Hedging opportunities. If you want not to sell, but preserveyour stocks the prices of which have dropped, then you may open short positions through doing CFD trading with a small deposit amount, gain back the funds you have lost in actual stocks and cut your loss to minimum; and
- Instant execution of transactions. Your transations will be executed without delay in Instant Execution mode.
Do your CFT trading through "Mugan FX ", why?
- We are more relaible and safer partner in cooperation, having 20 years working experience;
- We offer most qualitative FOREX service;
- We work with less commissions;
- We execute your instruction in Instant Execution mode;
- We offer currency transactions, precious metals trading and CFT trading in one station; and
- We offer our traders the lowest quotations.
CFD Trading Terms
The maximum limit of one trading position shall be no more than 25 lots.