Tag Archives for Cfds

What Is The Difference Between Spread Betting On Financial Markets And Cfds?

CFDs are Contracts For Difference. In a nutshell, it is an agreement between you and your broker to settle the difference in your buy and sell prices instead of having to buy the stocks and then sell them (or to short the stocks and then having to buy them back.) It is a legal instrument which is frequently used as a convience tool to bet on the bear side in place of shorting a stock.
Spread Betting works almost the same way except that it is still very gray in many countries and is mostly conducted between you and your broker without any regulation from the local exchanges. It therefore cannot be technically known as a legal financial instrument.
If you ask me how does all that difference affect small retail investors? Frankly, it does not make much of a difference to small retail investors.http://www.mastersoequity.com