Traders use derivatives to hedge against risk and to generate profits. Under the derivatives umbrella, there are futures and forwards, options, contracts for differences (CFDs), and swaps. For starters, these assets derive their value from underlying assets but significant differences exist among them. This article explores the differences between CFDs and futures.
CFD has become one of the most popular trading derivatives worldwide, especially in forex trading. Investors nowadays are making a beeline for its profitability. Attracting by its high leverage, new traders have yet shrunk back in fear for its potential risk.
CFD (Contract for Difference) has become one of the most popular financial derivatives with high daily trade volumes. ZFX hereby offers an in-depth explanation of CFD in terms of product features, principles, trading cost, and the range of tradable assets.
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