Contract for Difference or Contracts for Difference is a popular form of derivative instruments. With CFDs, you don’t have ownership of tangible assets. Instead, you exchange the price difference of the underlying asset between the opening and closing time of the contract. Leveraged CFDs allow you to gain broad exposure to price movements without investing in the total trade value. Using leverage, you can gain exposure to the same number of shares but with lower capital investment. If the required margin is 5% of the total trade value, it will require you to pay only $6.50 per CFD unit. Different regulatory bodies have different limits for leverage. We know a minor difference in price as “pip” or “percentage in point” In the forex market, a pip is used to denote the smallest price increment in the price of a currency. This continuous evaluation of price movements and resultant profit/loss happens daily. It leads to a net return (positive/negative) on your initial margin. Hedging is a strategy you can use when you want to invest in protecting against downside risks. A significant advantage of CFD trading is the opportunities to hedge your portfolio against short-term market volatility. In CFD Trading, you won’t need to pay stamp duty and trading will limit costs to margin and spread. Learn as much as you can about CFDs and how to trade them. Look at these six steps to trading CFDs. With CFD brokers, you can trade CFDs across Forex, Shares, Metals, Commodities & Cryptocurrency. They offer 10,000+ tradable CFD products across global financial markets available on your desktop and mobile. Trading with good charting tools helps you identify volatile markets and potential trading opportunities. Choosing the right trading platform is one of the significant benefits of trading charting tools. The popular trading platform range includes MetaTrader 4, MetaTrader 5, IRESS. One of the unique features of CFD trading is the ability to go ‘long’ or ‘short’ in falling markets. As you do not own the underlying asset, there is no stamp duty associated with CFDs. You can hold CFDs for as long or as short as you want.