Contract for difference
Chapter 1: What is a CFD? A CFD is a derivative that allows you to trade the price of a stock, asset or other financial product without actually having to own the underlying stock or product. Trading CFDs works very simply: you decide to buy a CFD based on the price of Brent Crude oil (let’s say it’s current level […]
Why buy derivatives?
There are two main reasons for buying derivatives: speculation and hedging. Some securities, like contracts for difference, can also offer investors a way to trade in assets without the need to physically own that asset – for example, you can buy or sell the price of crude oil, without having to make room in your garage for all […]
What is a derivative?
Financial derivatives are so amazingly varied that it’s actually a bit misleading to call them a single ‘market’. Think of all the things we’ve learnt so far about financial markets: about shares, currencies, commodities, indices and so on. There will be a financial derivative linked to every one. And this is the explanation for the term ‘derivative’. These securities are derived from other assets […]
