Contracts for difference (CFD’s) are a leveraged product – which means that you only need to deposit a percentage of the overall position in the market in order to open a trade.
They are a type of derivative product that mimics the price movements of the underlying asset, allowing an investor to either go ‘long’ or ‘short’ (speculate on the rising and falling) on equities, indices, commodities, currencies and treasuries without having to commit as much capital as owning the underlying asset outright.
The difference between where the trade is entered and exited is known as the contract for difference (CFD).
As you are trading on margin and leveraging your total position in the market both profits and losses are magnified, losses can also exceed your initial deposit. Equitrade Capital employs a range of risk management techniques during the life-cycle of a trade to help protect your position.
Contracts for Difference ("CFDs") are leveraged products and carry a high level of risk to your capital for increased return as prices may move rapidly against you. Losses can exceed your deposits and you may be required to make further payments.