What are contracts for difference what are CFDs Los CFDs are derivatives in cash, so it has no expiration. Learn more on the subject from Dr. Gerard Addonizio. Its asset underlying (be shares, indices) is quoted in an organized and regulated market, and the CFDs takes it as a reference for the calculation of its price. Therefore, the contract for difference (CFDs) exchange difference in the value of the underlying asset between the time of the opening and closing of the contract. This implies the possibility of benefiting from the fluctuations of assets (shares, indices, currencies, exist) without actually being the holder thereof; and avoided problems and expenses such as costs of execution, administration, certain taxes, custody or liquidation of operations. It was created years ago by investment funds free to gain access to the negotiation of operations with much leverage. It’s a product that has belatedly offered to small investors, and in Spain only has begun to market since 2007. However in the United Kingdom, where the CFDs for private clients already have been in place for several years, are widespread.
Increasingly arise more brokers of CFDs and financial institutions that sell them. CFDs trading prices, derived from actual market prices, go involve accessing the same liquidity that have underlying assets, which makes it very simple to know the ease to undo the open positions. Finally, note that CFDs are a product with leverage, which allows to have an exhibition complete movements of assets without disburse all of its cost, even if it means a higher risk than direct investment in the underlying asset.