Excerpt from: Understanding Spread Betting
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| May 01, 2007 | | What are contracts for differences? | One of the products offered by GFT Global Markets, in addition to spread betting, includes CFDs. CFDs stand for contracts for diferences, and these are agreements to settle the differences between the opening and closing prices of a contract. Traderpedia explains how CFDs work:
Contracts for Difference (CFDs) are derivatives
traded in a similar way to ordinary shares; however CFDs are traded
principal-to-principal with no centralised market quote. As such, they
are deemed to be off-exchange or over-the-coutner (OTC) products and are not specifically covered by any stock exchange rules. | | |
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