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Hello all,
My background is futures trading (prop firms for 2+ years and energy futures for 2+ years) executing through CQG and TT X_Trader pro direct to the exchange. I understand trading, markets and risk but I do not understand CFDs, are they real markets? Can you trade them and make money in the long term or are they rigged in some way for the house? I have searched all over the internet but have struggled to find credible information; it all looks very much like a scam. Can someone point me in the right direction please?
Artemiusgreat
Advantages:
1. high leverage 1:50 maybe even higher
2. most of the companies offering CFD are registered on Cyprus or other offshore locations, so you don't have to pay taxes
3. it's better than Forex because prices are still taken from the exchange, so if you think they closed your position unexpectedly you can dispute this
Disadantages:
1. CFD means that you don't own real stock share, but rather bet against the price grow or fall, which means that it's close to gambling and some small brokers without reputations can bet against you because if it's not a real market then you're playing against them, big brokers usually try to play fair
2. just like on Forex, with CFD you don't own real stock and can't get dividends, so in real market you keep the stock and get money, with CFD you keep the stock and lose money, so only intraday trading works here
3. you will pay quite high swap to transfer position overnight, about $5 every night :)
Jared Broad
CFD's are not available to US residents due to local regulations so many US people have never heard of CFD's.
The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.
Artemiusgreat
Officially, not available.
Unofficially, you can find brokers that can accept your application :)
As I said, most of such brokers are in offshore zones, UK, Russia, Cyprus, Australia, Belize, so they don't require your Tax ID, and as a result you can register using any address you want. The only trick is to find payment system that avoids US banks.
J Mas
CFDs were initially introduced in the early ‘90s as a tool for London-based hedge funds, offering leverage for short selling and stamp duty exemptions. Around 2000, however, investors realized that the real benefit of trading with CFDs was not the exemption from stamp duty, but the possibility to apply the financial leverage to any underlying asset.Â
Today, CFDs appeal to a broad range of traders due to their unique features and cost-efficiency, offering access to diverse investment instruments including equities, stock indices, commodities, bonds, foreign exchange, and even cryptocurrencies, all from one account.Â
I invest in equities and bitcoin but for day trading I only trade CFDs. I can go long or short, all day, at no cost, except the spread. In the UK I have been using FinecoBank.
Sean Bird
The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.
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