Contract for Difference (CFD) is a contract for both parties (traders and customers) to trade at the difference between the market price (open price) and the contract price (closing price) of the trading product covered by CFD. CFD is a financial derivative that allows traders to profit from related transaction prices and declines. CFD trading is similar to traditional transactions, and the difference is that there is no need to buy actual stocks, currencies or commodities.
Margin trading allows you to invest in a small amount of money to trade. When the market moves in the expected direction, through the lever it can increase profits. On the contrary it will cause increased losses. Therefore need to pay attention to the use of leverage: risk management is very important.
If you think your stock will fall but do not want to sell, you can hedge the risk by making a reverse position. As a profit or loss in one direction will compensate for the loss or profit of another position. Compared with the sale of real assets, the cost of hedging is lower than the redemption.