What is CFD Trading?
Contracts for Differences or CFDs allow you to speculate on future price movements of the underlying asset, without actually owning the underlying asset. It is a tradable contract between you and Phillip Securities Pte Ltd (also known as a CFD Broker), who are exchanging the difference in the current value of a share, commodity or index and its value at the contract’s end.
Why Trade CFDs?
The Ability To Perform Short-Selling
CFDs allow short selling, for any duration you wish. As opposed to Buy Low and Sell High, investors can now sell first when the price is high and buy it back when the price drops.
CFDs are Traded on Leverage
CFDs are traded on leverage. The capital outlay to open contracts will be only a fraction of the market value. Lower margins allow traders to have a higher buying power.
Access to Multiple Asset Classes
Gain unparalleled access to > 5,000 contracts across Equities CFD, Commodities CFD, Indices CFD and Forex CFD.
Diversify and trade across 8 global markets!
How are CFD Trading Done?
We do not add any spreads for CFD and Direct Market Access(DMA) CFD. Prices quoted on CFDs mirrors the prices quoted on the normal stock market.
Any limit order for CFDs submitted at prevailing market bid/ask prices exceeding the following limit(s) might be rejected or delayed subject to our approval:
CFD (whichever has a lower contract value)
- Maximum quantity per order: 500,000 shares
- Maximum contract value per order: S$500,000
Understanding Contract For Differences (CFD)
“What is CFD?” might be a question that has popped up into the minds of those that just recently got acquainted with the concept of investments.
It’s not a question that I can answer in just a quick sentence so here is my attempt to answer it in a quick post then.
However, before we dive into “What is CFD”, it is paramount for you to understand the reason why you have to spend time reading about this product. Is it really a product that is worth your attention? Read our article to find out more!