What are CFDs?

Contract for Difference (CFD) is an agreement to exchange the difference between the opening and closing price of the position under the contract on various financial instruments. CFDs allow traders to benefit from the capital gain from a particular stock, index or comodity without having to actually physically own or pay for it.

Stock CFD traders also participate in corporate actions like dividends. The buyer of a stock CFD will receive cash dividends and the seller of a stock CFD will pay cash. Both parties will also participate in stock splits and reverse splits.

CFD traders are required to maintain a certain amount of margin depending on contract specification. One advantage to the traders of not having to put up as collateral the full notional value of the CFD is that a given quantity of capital can control a larger position, amplifying the potential for profit or loss.

Contracts for difference provide an excellent vehicle for short term trading strategies and are the preferred vehicle amongst hedge funds and professional traders.

Basic CFD advantages:

• Easily acceptable access to leverage;
• Short trades;
• There are no time limits on CFD. You don`t have to worry about missing the expiry date;
• There is no physicall delivery of the underlying stock or commodity;
• No stamp duty *.

(*) Tax laws can change.

Why trade CFDs with Renesource Capital?

• Electronic market access;
• Several electronic platforms;
• Wide range of available CFDs;
• Competitive margins;
• No hidden costs.