What is a CFD in simple terms
In short: A CFD (contract for difference) is an agreement with a broker under which you receive or pay the difference between a trade's opening and closing price. You do not buy the asset itself. CFDs are almost always leveraged, and most retail accounts lose money on them.
Why people use them
You can trade currencies, gold, indices and shares in both directions with a small deposit.
Why they are risky
Leverage, overnight fees (swap) and dependence on a broker that is often the other side of your trade. That is why the broker's licence and a fixed risk per trade matter.
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Trading on financial markets carries a risk of losing money. This material is educational and is not investment advice.
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