CFDs Advantages over Stock Trading
It would be worthwhile to note the difference between CFDs (contracts for differences) and ordinary shares, before getting into the advantages of using one for the other. Contracts for differences are basically agreements that are made on the price movement of an underlying asset. This asset could be anything that represents some value for the two parties which have entered into an agreement over its price movement. This means that the asset could be a commodity, like oil or gold. The asset could also be another financial instrument, like a stock share for instance. On the other hand, stock is a unit of capital that a person owns in a company. This could be a company listed in a local or international stock exchange market. It could also be a unit of capital in a privately owned company. However, for our discussion, only stocks owned in publicly traded companies (companies that have their shares listed in a stock exchange) will be considered.
This is a companion discussion topic for the original entry at https://www.bestbrokers.co.uk/blog/2014/08/11/cfds-advantages-over-stock-trading/