CFDs Examples | Spread Co

How to Trade CFDs

Trading Contracts for Difference may appear quite daunting and difficult on first look, but in fact it is really quite straight forward.

What you need to understand is that you are not buying a physical asset like a share in a company or gold bullion, but instead you are betting on the movement in the price so that you can close the trade at a later date, hopefully for a profit.

When you buy CFDs in the FTSE 100 (UK100), say at 5,000, you are hoping the price of the FTSE 100 index will increase in value. When you go to close the trade, say at 5050, you will have made 50 times the number of CFDs that you traded.

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